- What Is The Paycheck Protection Program (PPP)?
- Understanding The PPP’s Requirements And The Charges For PPP Loan Fraud
- How Do The Feds Investigate?
If you or anyone you know in Southern Nevada— whether in Las Vegas, Henderson, Boulder City, or even Mesquite and/or Laughlin—find yourself in trouble over potential fraud connected with the Paycheck Protection Program (PPP), you need to reach out swiftly for a strong defense. Call us now.
You need the expert legal advice of Yampolsky & Margolis Criminal Defense Las Vegas. You can reach us 24/7 at (702) 385-9777 or set up an appointment through our website at yampolsky-and-margolis.mysites.io. Our office has over 40 years of experience and we are proud of the outcomes we have achieved for our clients. When you retain us you can rest easy that you are hiring the best defense team to meet your and your business’s criminal defense representation needs.
HISTORY OF THE PPP PROGRAM
The Coronavirus Aid, Relief, and Economic Security (CARES) Act passed by Congress and signed by former President Trump in March 2020 made over $2 trillion of federal aid available to American individuals, families, the unemployed, and struggling small businesses. The PPP program, one part of the CARES Act, authorized nearly $350 billion in potentially forgivable loans to aid small businesses in weathering the financial turmoil, provided they met certain qualifications. Chief among those qualifications and/or expectations was keeping people employed.
Since the initiation of the PPP program the Justice Department has brought criminal charges against a minimum of 209 individuals in 119 cases since banks and other lenders began processing PPP applications via the Small Business Administration (SBA). The SBA began processing applications in early April, 2020.
Many of those cases have gotten a lot of attention, like the array of fraud charges brought against Jorge Abramovs. Be the amounts big or small, call us and we can help you avoid the worst and find the most painless resolution possible.
The SBA allowed PPP recipients to use federal funds to assist with payroll costs, rent, interest on any mortgages directly connected to the business or businesses, and other expenses such as utilities. Usage of the funds for any other purpose would be a violation of the loan agreement.
Many, of course, as in the case of Mr. Abramovs, used PPP funds to pay off personal real estate mortgages, as well as purchase automobiles, take lavish vacations, and similar other violations. In some instances, if the small business used the funds appropriately and within a set period of time defined by the PPP agreement, most or the entirety of the loan could be forgiven. The loan could–in practical effect–ended up having been a grant, but not if you played fast and loose with the rules.
The idea behind the program was to keep small businesses afloat during the initial shutdown in the first half of 2020. Most businesses filed correctly and kept accurate records as required. As with any large pool of money, however, illegitimate claims were filed and people took advantage of the opportunity to grab large sums of money through false filing of inflated payroll expenses in order to obtain larger loans, fake EIN numbers, revival of dormant corporations under false shell companies in order to receive fraudulent PPP relief, and multiple other cases. Under federal law, if convicted, these charges carry potential decades of prison time. The loss amounts will often dictate just how draconian the sentence may be.
FEDERAL AND/OR STATE CHARGES
The Department of Justice (DOJ) in a March 2021 memo stated that it will focus intently on fraud related to the CARES Act, including the PPP program.
In coordination with the SBA’s Office of Inspector General, the DOJ has aggressively pursued PPP violators. If convicted of these charges, the penalties run very steep.
Potential charges could stem from violations of the False Claims Act, False Statements to the Government, Bank Fraud, Wire and Mail Fraud, Tax Evasion, Making False, Fictitious, or Fraudulent Claims, as well as Misrepresentations to the SBA. Convictions for any of these crimes or more carry penalties that will land you in a federal penitentiary for decades, as well as substantial financial restitution.
OUR OFFICE SPECIALIZES IN PROACTIVE DEFENSE
As stated in other places on our website, if you have been charged with any crime, including PPP fraud, your best defense option is to be proactive. In business, reputation is everything. The legal experts in our office will assist you in protecting your assets and reputation. We will provide documentation and substantiate the accuracy of the information you provided on your initial PPP application via the SBA.
We will build further on the initial filing and compile documentation to show your company met the “necessity” requirement, if that is an issue in your fraud charges, as well as provide documentation that your business was in compliance with the SBA loan guidelines. We will provide an accurate accounting of how your business used the SBA funds, along with a comprehensive transaction history. At the end of the day, proper and comprehensive documentation can win the day.
WHAT TO DO IF YOU ARE IN A BUSINESS PARTNERSHIP
If you are in a business partnership and your partner has acted unethically, including PPP fraud, you may be dragged into the ensuing legal fray. You will want the strongest defense you can get to protect yourself, your investment, and your reputation.
Even if you were not actively complicit in the PPP fraud and knew nothing about what your partner was doing, you may still be considered criminally liable for the violation. If you profited from a crime, even unknowingly, you can still be charged for that crime. Penalties could include federal prison as well as reimbursement, but you may also face other legal issues such as lawsuits from investors and/or shareholders, if you have any.
If we manage a strong defense for you and prove you were not complicit in your partner’s crime, he or she is still a partner in the business and you may have to pay restitution or penalties from the business for their crime. If your partnership was a Limited Liability Company (LLC), you may face other legal issues. LLC’s are considered “legal” persons and thus can also be charged. The LLC could face fines, sanctions, or revocation of a business license.
As the business owner, you must protect yourself, your business, and your reputation. The SBA has incentivized employees to come forward and report PPP fraud if they know it exists. You should hold the same incentive for yourself so you are not dragged into a litigious nightmare. In the challenging world of business, you must do all you can to protect yourself. If you’re charged with PPP fraud on any level, you should reach out to us for your defense as quickly as possible. With over 35 years of legal experience here in Nevada, we are the only defense you need.