See Ron’s Published Article About White-Collar Enforcement Predictions
As a result of the COVID-19 pandemic, the government quickly gave out billions of dollars through various relief programs, such as the Paycheck Protection Program (PPP), the Small Business Administration (SBA) loans, and the Coronavirus Aid, Relief, and Economic Security (CARES) Act. In 2020, the government approved $3.1 trillion in relief funds, then added another $1.9 trillion to the effort in 2021. Many of these aid programs were overwhelmed with applications, as the coronavirus hit nearly every industry all over the country. At the time, the need for aid was high and oversight was low.
Now, federal and state investigators are working around the clock to combat Covid-19 related fraud. Government agencies are auditing these programs and prosecutors are charging people and businesses with fraud. Investigations are being carried out by the FBI, the Secret Service, the IRS Criminal Investigations Department, the Postal Inspection Service, the Labor Department’s Inspector General’s office, and the Small Business Administration. From new task forces (DOJ Announces Nationwide Coordinated Law Enforcement Action to Combat Health Care-Related COVID-19 Fraud), raids, and cross-agency cooperations, the prosecutors’ focus is on healthcare and telemedicine fraud, banking fraud and related conspiracies. The U.S. Department of Justice and U.S. Department of Health and Human Services (HHS) continue to receive extra resources and are laser focused on weeding out perceived widespread fraud in this area.
- As of fall 2022, the federal government has charged over 1,500 people with defrauding pandemic aid programs, with over 450 convictions so far.
- At the same time, the Labor Department had at least 39,000 investigations open.
- The Justice Department has charged people with over $1 billion in pandemic fraud, with open cases involving another $6 billion.
Normally, the statute of limitations – or time limit – for charging someone with fraud crimes is 5 years from the time the crime has been committed. However, President Biden recently signed a law extending the statute of limitations to 10 years. This change gives investigators more time to track down and prosecute any fraud related to COVID-19 pandemic relief.
If you’re facing a potential COVID-19 relief fraud conviction, you need a strong defense by an experienced criminal attorney to fight the charges. Our seasoned white-collar criminal defense lawyer can help. Call us now at 855-284-1876 to see if you would be a good fit for our firm.
Are PPP Loans Being Investigated by the Government?
The Paycheck Protection Program (PPP) has become a major focus for the U.S. government since the Treasury Department announced plans for extensive audits starting in April 2022.
Does this mean that all PPP loans will be audited? Not necessarily.
The Treasury Department’s primary focus is on PPP loans of over $2 million. However, they aren’t the only ones investigating government aid programs. The DOJ, FBI, IRS, and SBA are also actively searching for fraud from various angles.
These investigations aren’t limited to just the Paycheck Protection Program, either. The pandemic’s Economic Injury Disaster Loan program allowed businesses to self-certify that they met the necessary requirements, even if they actually didn’t. The Unemployment Insurance program is also another target for fraud enforcement teams.
The good news is that most small instances of fraud or theft are generally not worth the effort for government agencies to investigate. A case worth under $20,000 may not get the attention of an investigator who’s more focused on finding career criminals or fraud operation ringleaders – especially when it would cost more to investigate the case than the case is worth.
The bad news is that if you’ve been targeted for prosecution and charged with fraud, the government thinks you’re a big enough fish to focus its efforts on you. That’s when you really need a seasoned defense lawyer to help resolve your situation in a favorable way.
What Constitutes PPP Fraud?
What happens if someone lies to get a PPP loan? If you put false information on your PPP application, that could make you a target for government investigators looking for fraud. Even if you didn’t mean to intentionally lie, you could still be accused of doing so.
PPP fraud (and other COVID-19 relief or government benefits fraud) involves intentionally lying to the government when applying for these programs. You could be held guilty of criminal fraud if you knowingly submitted false information on your PPP loan application or your PPP loan forgiveness certification.
Examples of PPP fraud or CARES Act fraud may look like:
- Claiming fewer employees than your company actually has,
- Failing to disclose any changes if an employee leaves,
- Over-reporting the monthly cost of payroll,
- Not actually using relief funds for qualified expenses, or
- Overestimating how much the pandemic hurt your business.
You could even get in trouble for submitting incomplete information in your PPP form, especially if the information you left out could have changed the outcome of your application. Government investigations may also extend into allegations of tax fraud, especially when it comes to tax credits, underreported income, or tax deductions related to PPP funds.
What Is the Punishment for PPP Fraud?
How much legal trouble can you face for PPP or government aid fraud? That answer depends on the specifics of the fraud accusation you face. The more substantial the lies, the greater the funds, and the worse the offense, the greater punishment you’ll face.
First off, can you go to jail for taking a PPP loan under false pretenses? The answer is yes. Fraud can qualify as both a civil offense and a criminal offense.
Specifically, if a court finds you guilty of PPP loan fraud or CARES Act fraud, you could face up to 5 years in federal prison and a fine of up to $10,000. In addition, you may be ordered to pay restitution – or pay back the funds you received from the program.
However, you may face even greater charges for additional crimes, such as tax fraud, bank fraud, wire fraud, embezzlement, making false statements, conspiracy, or aggravated identity theft. These charges could carry significant penalties, especially if they stack up.
A skilled defense lawyer can help you navigate the justice system, understand the best options available to you, and take the steps you need to minimize the penalties you face.
How to Best Defend Against Accusations of Fraud
You could be charged with fraud for misuse of any government relief funds, whether the programs are related to the COVID-19 pandemic or not. Any fraud charge is serious and should be treated with the highest priority – that means talking to a lawyer as soon as possible.
A charge does not automatically mean you’ll get convicted. But if you’re facing fraud charges and you want to avoid getting a fraud conviction, you must invest in a quality defense team.
Depending on the unique facts of your case, you could argue as a defense against fraud that:
- You never had the intention to commit fraud and the information you provided was accidentally false. The pandemic was a time of incredible stress. It’s no surprise that some information may have fallen through the cracks.
- The agency made a mistake even though your forms were submitted correctly. This is why it’s important to keep all of your records as a business owner.
- The government may have gathered its evidence against you through illegal surveillance, in which case it would not be admissible against you.
- You were tempted or persuaded to commit a crime you otherwise wouldn’t by a law enforcement agent, which could be a form of illegal entrapment.
- You were coerced into committing a crime by someone else.
To convict you of fraud, the government must prove its case beyond a reasonable doubt. This is an extremely high bar. A strong defense could introduce the doubt you need to be acquitted.
If acquittal isn’t an option, a good lawyer will fight to get you the most lenient sentence possible – whether that involves a plea agreement or cooperating with authorities in another case. When you work with the knowledgeable defense attorneys at Herman Law, our team of veteran attorneys will make sure you have the top-notch defense that you deserve.
ABOUT OUR FIRM
Attorney Ron Herman represents clients who have been charged with both state and federal crimes, including all types of fraud offenses, many of which are prosecuted at the federal level. Whether you are a suspect in a federal fraud investigation, or if you have already been charged with a fraud offense, there is a good chance that state or federal authorities are pouring their vast resources into your investigation, thereby demanding that you have a strong defense.
Attorney Ron D. Herman is a former prosecutor with over 180 jury trials to his credit. You can look to his professional accomplishments and accolades to confirm that he is the West Palm Beach criminal attorney to trust with your fraud case, some of which include:
- AV Preeminent® Rating from Martindale-Hubbell®
- Selected for inclusion in Florida’s Super Lawyers® Rising Stars℠
- 0 Superb Avvo Rating
- Featured on Fox News, Channel 5, and in the Palm Beach Post
We are selective in the types of cases we represent, focusing on white collar offenses, such as financial fraud offenses, patient brokering and healthcare fraud. Ron is well-known in and out of the legal community as a skilled criminal litigator who is respected by judges, prosecutors, and community leaders. He has extensive experience defending a wide range of medical and business professionals in the healthcare field. Contact us now to see how we can work together.