fbpx

The chase of PPP fraud is on

When the federal government raced to release more than $2.2 trillion in coronavirus aid earlier this year, it did so knowing that some of that money would go to fraudulent claims.

With the money needed immediately by struggling businesses and workers, the government could not efficiently control fraud on the front end, so it was willing to pay invalid claims knowing it will chase the money through aggressive civil and criminal enforcement actions, a practice called “pay and chase.”

While the federal government chasing fraud is nothing new, never has the chase involved so much money, paid out to so many, in such a short period of time. And complicating matters is that PPP recipients by their nature, are small businesses, not the highly-regulated industries used to receiving federal aid.

Government officials believe a significant portion of the $2.2 Trillion was obtained through fraud and are acting accordingly. We are starting to see the first Paycheck Protection Program prosecutions, and the Department of Justice is gearing up for enforcement actions. Attorney General Barr has directed every United States Attorney’s Office to focus on detecting, investigating, and prosecuting all criminal activity related to the COVID-19 pandemic. Here in South Carolina, U.S. Attorney Peter McCoy has created a multi-agency task force to root out PPP fraud.

Although impossible to predict the exact contours of the coming enforcement actions, we are beginning to see patterns in the charging decisions:

  • There is a complex statutory and regulatory framework directly applicable to SBA Fraud. Knowingly submitting a false claim to the Small Business Administration, which administered PPP carries up to 2 years in prison and a $5,000 fine. Prosecutors also can charge for making a false statement to the government or to a financial institution, which carry up to 5 years and 30 years respectively.
  • The government can go after cases in which no money actually changed hands. Even conspiracy to defraud charges carry the risk of significant prison time. The primary driver for sentencing in these PPP fraud cases, absent extreme circumstances, will be the amount of money applied for in the fraudulent loans.
  • Criminal liability will be around for a long time. Due to the fact that PPP fraud will almost always involve a financial institution, federal prosecutors can charge crimes with 10-year statutes of limitation. This means PPP criminal liability will be out there until 2030.

People or businesses that find themselves a subject or target of a PPP or Cares Act fraud investigation should immediately retain a criminal defense attorney who focuses on white-collar crimes. Not only should the attorney be well-versed with the complex legal framework for PPP fraud cases, but it will also help if the attorney understands how the government intends to enforce it.

Our Experienced Lawyers

How can we help? Fill out the form for a free case review.

    Contact Us

    Case Types

    Related Posts

    RPWB is a 2020 U.S. News & World Report Best Law Firm

    CHARLESTON, S.C. – U.S. News & World Report has named Richardson, Patrick, Westbrook & Brickman as a 2020 Best Law Firm for the firm’s work in personal injury, mass torts and class actions, product liability, medical malpractice, securities litigation, healthcare law and railroad law.

    U.S. News’ announcement came on the heels of the 2020 Best Lawyers in America list, in which 16 RPWB attorneys were recognized for work in their respective practice and geographic areas. This included a Personal Injury Lawyer of the Year designation for Dave Butler, an asbestos lawyer who works across the country helping people with mesothelioma lawsuits from his office in Aiken, South Carolina.

    RPWB was the top-listed plaintiff law firm in South Carolina for work on product liability cases, class action lawsuits and mass torts. In 2019, the firm had the most lawyers on the list in the entire country for mass torts and class actions.

    RPWB was founded in 2002, when four of the six shareholders of the very successful law firm Ness, Motley, Loadholt, Richardson & Poole formed a new firm to focus on complex litigation throughout the United States.

    RPWB attorneys regularly hold leadership positions on class actions and other mass torts across the nation. In 2019, RPWB lawyers were named to the leadership of national lawsuits, including the 3M Combat Arms Earplug MDL and the Aqueous Film-Forming Foams Product Liability MDL.

    The firm remains deeply rooted in work to help mesothelioma victims. Terry Richardson, a founding member of RPWB, was one of the first attorneys in the nation to win a mesothelioma lawsuit against asbestos manufacturers. Since then, RPWB has successfully represented mesothelioma victims throughout the United States. Several attorneys at the firm played pivotal roles in the fight against tobacco companies in the 1990s that led to the Tobacco Master Settlement Agreement. RPWB is currently helping six Canadian provinces in their fight to recoup money spent on treating smoking-related illnesses.

    In addition to national litigation, RPWB also works on individual lawsuits in a variety of practice areas, including: wrongful death, catastrophic personal injury, truck accidents, railroad accidents, construction defects, medical malpractice, mesothelioma and other occupational lung disease, whistleblower & qui tam, nursing home abuse, pharmaceutical drugs and medical device cases.

    Our Experienced Lawyers

    How can we help? Fill out the form for a free case review.

      Contact Us

      Case Types