Topic: Criminal Defense
When the COVID-19 pandemic took over the world, businesses across New York City and the entire country were temporarily forced to close their doors. Many companies applied for and received loans under the Paycheck Protection Program during this time.
PPP loans are for small businesses that need help paying employees and covering expenses. However, the Small Business Administration failed to issue eligibility requirements until after loans were distributed. This failure in oversight led to many people unknowingly making errors on their PPP loans.
But how can law enforcement tell which mistakes were made in good faith and require criminal investigation? Read on to learn more.
Good Faith Errors on COVID Loan Forms
You should not face criminal charges or prosecution if you made a good-faith mistake on your COVID loan forms. There are many different types of good faith errors that small business owners like yourself made on their PPP loans, some of which include:
- Mistakes made calculating payroll expenses
- Inaccurate accounting of full-time employees
- Erroneous determination of coverage periods
- Including independent contractors as part of your loan request
- Making impermissible purchases with loan money
- Failing to subtract employee payments greater than $100,000 in payroll expenses
- Other excess loan amount errors
The good news is that even if you did make a good-faith mistake on your PPP loan, you could still be awarded total loan forgiveness. However, you must repay the excess amount of the loan that you received. When a business intentionally misleads the SBA, they owe COVID loan fraud charges.
When a COVID Loan Form Mistake Becomes Fraud
There have been multiple public cases of people convicted in PPP and other COVID-related loan fraud crimes. The Justice Department has already filed more than 200 criminal charges.
Generally, those convicted of PPP fraud used the funds unlawfully, buying personal aircraft, sports cars, and other inappropriate items.
Other PPP criminal errors include:
- Creating fake companies to get loans
- Falsification of payroll documentation
- Falsification of business ownership records
- Providing fake addresses for supposed businesses
- Using defunct companies to apply for loans
- Falsification of tax documents
- Using stolen identities to apply for COVID relief loans
These are just a few instances where real people have had criminal charges brought against them for COVID loan fraud. Suppose you have been accused of any of the previously mentioned discrepancies in your COVID loan application. In that case, you need to take action to avoid the penalties of a conviction.
What To Do If You’re Under Investigation for COVID Loan Fraud
You may find yourself the target of an investigation. As the government and criminal justice systems work to identify and prosecute individuals who had legitimate criminal issues with their COVID loans, even good-faith errors may be initially suspect. If you learn that the government is investigating you for potential PPP loan fraud, consult a lawyer right away.
Don’t Speak with Law Enforcement
Do not make a statement or speak with law enforcement. Instead, remain silent and allow your lawyer to clear up matters and help you avoid criminal charges resulting in COVID loan fraud.
Contact a Criminal Defense Lawyer in New York City
Do you suspect that you are under investigation for COVID loan fraud or related charges? If so, you need a reputable New York City criminal defense lawyer at Protass Law PLLC to help you clear your name. The penalties of a conviction will be severe. Your future is on the line.
Schedule your initial consultation today so that we can get started on your defense strategy. Call 212-455-0335 or use our online contact form.