The government started the federal Paycheck Protection Program (PPP) to help businesses struggling to keep their doors open during the worst of the COVID-19 pandemic. This program essentially provided qualified businesses with funds to cover certain expenses, such as paying their staff or rent for their business space. Although helpful, the government is now claiming that many who used the program did so in error. In some cases, they claim the error was egregious enough to constitute criminal fraud charges.
What is PPP fraud?
PPP fraud essentially occurs when someone either wrongly applies for or wrongly uses PPP funds. In some cases, the government may attempt to build a case to establish that the accused used PPP funds for personal expenses. If the government can build a successful case, they can push for serious consequences. These can include imprisonment.
In a recent example, the government gathered evidence to establish a business owner fraudulently claimed the need for funds to help cover business expenses including payroll for more than 400 employees. He received almost $3 million to cover these expenses. The government claims that the funds did not go to workers, but instead were used for personal expenses such as the purchase of vehicles and a large personal estate.
The court sentenced the business owner to more than eight years imprisonment. The sentence is large for many reasons, including the fact the government chose to pursue multiple criminal charges, including wire fraud, identity theft, and illegal monetary transactions.
What can business owners learn from this case?
This case provides an example of the aggressive charges the government will pursue if they can build a case against those it believes committed PPP fraud. Do not take allegations of this nature lightly. It is wise to review the allegations carefully and tailor a defense strategy to the specifics of your case. The attorneys at Goldburd McCone have experience with PPP fraud cases and can discuss your options while building a defense to your specific situation.