What is PPP loan fraud and how can somebody be charged with it as a crime?
During the COVID-19 pandemic, the federal government enacted programs to keep businesses afloat. Specifically, PPP loans or Paycheck Protection Program loans were designed to help businesses maintain payroll, keep up with overhead expenses, and hire employees who had been laid off. In an effort to prevent fraud, the government enacted very strict requirements about how money from PPP loans could or could not be used. Failure to adhere to those requirements, even unintentionally, can cause somebody to be a target of a DOJ investigation.
Now today, many people are finding themselves a target of a PPP loan fraud indictment. Whether they intentionally misled the government, they had an error in their application, or they unintentionally spent the funds in a way that they were not supposed to, any type of federal fraud charges are a serious matter.
Most people charged with PPP loan fraud are accused of making false statements or submitting forged documents as part of their loan application, or preparing or submitting false documents as part of the PPP loan forgiveness, or using funds from a PPP loan for anything other than the designated purposes.
Most federal indictments for PPP loan fraud include charges of wire fraud, under 18 United States Code Section 1343, or bank fraud, under 18 United States Code Section 1344. Frequently, people are also charged with making a false statement to a federally insured bank under 18 USC 1014. The Department of Justice has aggressively prosecuted these cases, and they intend to keep doing exactly that.
The DOJ is ramping up investigations
On August 5th, 2022, President Biden signed the PPP and Bank Fraud Enforcement Harmonization Act of 2022. That was House resolutions 7352. That act established a 10 year statute of limitations for criminal charges and civil enforcement for an individual who engages in PPP loan fraud.
What this means is that the federal government has 10 years from the date of the alleged fraud to decide whether or not to bring charges. In that 10-year period, the 10 year statute of limitations is much longer than the statute of limitations that we see for almost any other federal offense. Because the Department of Justice has taken PPP loan fraud cases so seriously and has given every indication that they continue to do so, if you suspect that you’re a target of a PPP loan fraud investigation, it’s imperative that you contact a federal criminal defense attorney immediately.