The pandemic was a difficult time for everyone. Healthcare workers struggled to provide care, retail workers did their best to provide consumers the goods they had come to rely on restaurants shifted to delivery and take-out. Many of these changes were navigated by small business owners. These savvy entrepreneurs did their best to guide their businesses through the hurdles of a global pandemic while continuing operations.
Even those who found success often faced periods of financial struggle. Lawmakers recognized this struggle and passed laws to offer relief, most notably the Coronavirus Aid, Relief, and Economic Security (CARES) Act. This economic stimulus bill provided direct economic assistance through various programs such as the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL).
Unfortunately, navigating the rules for these programs was not easy and guidance was rare. Business owners did their best to work through the requirements to determine qualification, fill out the paperwork, and take the necessary steps to get much needed funding to keep their doors open. Now that time has passed, the government is cracking down on those it believes abused the system for their own financial gain. While some did, many small business owners were simply doing their best.
How has the government cracked down on allegations of CARES Act related fraud?
The United States Attorney General has cracked down on these allegations by putting together a group of professionals to gather evidence and move forward with prosecution against those it believes defrauded the system. The feds established the COVID-19 Fraud Enforcement Task Force (CFETF) in 2021 to address these allegations of pandemic related fraud. Two primary areas of concern: PPP and EIDL fraud.
Has the task force been effective in pursuing PPP fraud and EIDL fraud?
The most recent data shows that the CFETF has gathered evidence to support criminal charges against over 3,500 individuals. This has led to hundreds of settlements translating to almost $1.5 billion in seizures and forfeitures thus far. More than 2,000 defendants have accepted a plea deal or were convicted for allegations of PPP fraud or EIDL fraud and the U.S. Attorneys’ Offices state that they have a “similar” number of investigations that are still ongoing.
What should I do if I face allegations of pandemic related fraud?
Take the allegations seriously and know that defenses are available. The government is sending small business owners to prison for these violations. Various defenses may apply. For some, it may be wise to review the statute of limitations to see if the prosecution may be time barred from moving forward with their claim. For others, a careful review of the evidence can result in proof to establish that you did not violate the law. It is important to make sure that you tailor whatever defense strategy is best to your case. The attorneys at Goldburd McCone have experience building defenses to these types of allegations. They can review your case, discuss your options, and advocate for your rights throughout the process.