PPP Fraud and what you need to know
Nov. 18, 2022
PPP Fraud and what you need to know | Thompson Law Office
When the Paycheck Protection Program (PPP) was created in March 2020 as part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), it was designed to help small businesses weather the economic effects of the COVID-19 pandemic. The program provided low-interest loans that could be forgiven if businesses used them for certain expenses, like payroll or rent.
However, some business owners took advantage of the program by either knowingly or unknowingly submitting false information in order to obtain a loan they would not have otherwise qualified for. In other cases, business owners received PPP funds but failed to use them for their intended purpose, instead using the money for personal expenses.
What is PPP Fraud?
There are two types of PPP fraud: first, when business owners knowingly submitted false information in order to obtain a loan; and second, when business owners received PPP funds but used them for personal expenses instead of business-related expenses.
To be clear, it is not necessarily fraudulent to receive a PPP loan and use the funds for personal expenses. However, if you did so knowing that you would not be able to use the funds for their intended purpose, then you could be subject to charges of fraud.
Penalties for PPP Fraud
The penalties for PPP fraud can be severe. If you are convicted of federal charges of PPP fraud, you could face up to 30 years in prison and a fine of up to $1 million. In addition, if you are convicted of state charges of PPP fraud, you could face up to 10 years in prison and a fine of up to $500,000.
Furthermore, if you are found guilty of PPP fraud, you will likely be required to repay the loan in full plus interest and any other fees that may apply. And if your business received forgiveness for the loan, you could be required to repay that as well.
Defenses to PPP Fraud Charges
If you have been charged with PPP fraud, there are a few defenses that your attorney may be able to raise on your behalf. For example, if you can show that you had a good faith belief that you were eligible for the loan, then you may be able to avoid a conviction. Or if you can show that you used the loan for its intended purpose, even if some of the funds were used for personal expenses, then you may also be able to avoid a conviction.
Contact an Experienced Attorney Today
If you think you may have taken out a PPP Loan that you did not qualify for, or if you have been charged with PPP Fraud, do not hesitate to contact an experienced attorney. The attorneys at Thompson Law Office are here to help you navigate this complex situation and protect your rights. Contact us today for a free consultation.