COVID-19 Paycheck Protection Program (PPP) Fraud Attorneys
In March 2020, the United States Congress created the Paycheck Protection Program (PPP) as part of the Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act, which was the first federal response to the Coronavirus / COVID-19 global pandemic. During unprecedented times, concerns abound about fraud and schemes to capitalize on fear and uncertainty.
Many are being accused of fraud and criminally taking advantage of relief opportunities. Arkady Bukh is here to help those facing criminal charges for COVID-19 PPP fraud.
SBA Forgivable Loans
Due to forced social distancing, millions of small businesses were forced to close down or drastically change their normal business operations in March and April 2020. The CARES Act allocated more than $660 billion in a massive effort to offer swift payroll protection emergency relief.
The intent of the CARES Act and Paycheck Protection Program was to keep employees on payroll, have continued cashflow for living expenses, reduce unemployment rates and keep businesses afloat. If terms were met, loans would be forgivable.
Types of Alleged SBA & PPP Loan Fraud
As the number of cases, hospitalizations, and deaths continues to grow, demand for emergency financial relief has also grown. The spread of the disease and impact on individuals and businesses due to forced shutdown and quarantine is a serious concern. White-collar crime experts have predicted the stimulus and relief programs present huge opportunities for fraud to occur, while federal officials have made it clear there is a zero-tolerance policy for COVID-related crimes.
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Corporations large and small are receiving large amounts of money, under terms of dire need and extreme urgency. Where there are large sums of money available, there are large frauds. Some of the types of PPP fraud being alleged include:
- Payroll Fraud: In May 2020, the U.S. Department of Justice alleged that two men had fraudulently sought loans, claiming they had dozens of employees on payroll when they actually had no employees at all.
- Fake Employees: Ghost employees are fictitious employees that don’t actually work for a company, existing only on paper. They are created as part of fraud schemes to try to make a case for approval of a forgivable loan.
- Identity Theft: Identity thieves posing as real business may submit bogus applications to lenders, and then funnel the money away. Others may pose as the Small Business Administration, requirement payment upfront or high-interest bridge loans.
- Money Launderers: Money launderers commingle funds from criminal enterprises, like cash business schemes, to secure forgivable loans.
The DOJ has adopted some of the tactics of the healthcare fraud task force, using data analytics to spot trends and detect fraud.
Common Defenses to PPP Loan Fraud
People facing Covid-19 SBA loan fraud charges may argue (1) that they did not intend to defraud, such as they accidentally provided false information, or (2) the Small Business Administration made an error.
The CARES Act does not fully establish all the requirements for participation in the programs it makes available and instead, relies on agencies and departments to carry out these programs.
PPP Fraud Conviction Penalties
The risk of any white-collar criminal case is the potential penalties, which may include severe fines, home detention, community confinement, paying the cost of prosecution, forfeitures, restitution, supervised release, and lengthy imprisonment. For immigrants, the consequences of a fraud conviction can be serious, as fraud involving more than $10,000 is an aggravated felony. Fraud is also a crime involving moral turpitude (involving dishonesty or socially unacceptable behavior which would make non-citizens vulnerable to deportation.
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If you are facing federal criminal charges related to COVID-19 fraud, it is imperative that you contact us immediately to ensure your legal rights are protected. Do not delay, as your future is on the line.
Building a successful defense requires an experienced and aggressive NYC federal criminal defense lawyer who can act quickly. Call us 24/7.