Federal government starts cracking down on PPP fraud

By KevinMarcilliat, In White Collar Crimes, 0 Comments

The coronavirus pandemic has hit small businesses hard, and many are desperate for funds to keep their doors open. An alphabet soup of financial aid – PPP (Paycheck Protection Program), EIDL (Economic Injury Disaster Loans) and MSLP (Main Street Lending Program), to name a few – is available through the federal government. During its four-month run, PPP alone received more than five million applications and disbursed more than $500 billion.

With such vast sums of potentially forgivable loans available on such a large scale – and during times of crisis when it might seem like the government is looking the other way – fraud was bound to occur. Now, some of those cases are coming to light. And the charges are nothing to bat an eye at. They range from bank and wire fraud to identity theft, conspiracy and tax evasion.

A few examples:

These cases are just the tip of the iceberg. Many more are likely to follow. Some speculate that we’re on the brink of a wave of scandals involving the “big fish” – large, well-off companies that took advantage of funds meant for small businesses. The Department of Justice emphasized its commitment to cracking down on fraudulent use of COVID relief funds, and the FBI established a task force dedicated to investigating these cases.

One thing is certain: these charges (and the preceding investigations) shouldn’t be taken lightly. Like other types of federal fraud cases, those involving COVID relief funds pose harsh penalties. Convictions can result in mandatory minimum sentences that mean spending decades in federal prison.

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