The Paycheck Protection Program (PPP) is a federal program that offers small businesses loans to help them survive due to government forced shutdowns or reduced operations as a result of attempts to reduce the spread of the coronavirus. It is touted by financial professionals as a low-risk loan that, for many businesses, is eligible for forgiveness. This can lead to much needed funds to help entrepreneurs continue operations during unprecedented times.
Unfortunately, a program that the government presents as a helping hand also comes with teeth. If the feds believe the business owner was not truthful when applying for the funds, they can pursue criminal charges against those business owners.
What do the feds consider untruthful when filling out PPP loan applications?
In a recent example, the feds accused two business owners of exaggerating the number of employees and payroll costs of their businesses to get PPP loans. Based on these allegations, the prosecution has charged the entrepreneurs with multiple crimes including wire fraud, bank fraud, theft of government property, and aggravated identity theft. If convicted, the business owners could face decades of prison time.
The business owners also face allegations of abuses of state programs that offer benefits similar to those of the PPP.
The case is an example of the serious penalties that can come with allegations of tax crimes. We are not yet certain how far the feds will go with these types of allegations or when they will consider a simple mistake to rise to the level of criminal activity. As a result, anyone who faces these or similar allegations would be wise to take the matter seriously. The attorneys at Goldburd McCone are familiar with tax fraud and related criminal charges. They can review the allegations and discuss your options, better ensuring your rights are protected throughout the process.