PPP Fraud Litigation & Prevention
Federal Authorities Are Actively Targeting PPP Loan Applicants and Recipients in Civil and Criminal Litigation
Allegations of Paycheck Protection Program (PPP) fraud present substantial risks for business owners and other individuals. These allegations can lead to civil or criminal litigation under the False Claims Act (FCA) and other federal statutes, with potential consequences ranging from civil fines to federal imprisonment. Those who are concerned about facing PPP fraud litigation should take proactive steps to mitigate their risk, while those who are currently facing litigation need to engage experienced federal defense counsel immediately.
Examples of Recent PPP Fraud Litigation
Federal authorities including the U.S. Department of Justice (DOJ) and IRS Criminal Investigation (IRS CI) are actively targeting PPP loan applicants and recipients. Here are some examples of recent litigation involving allegations of Paycheck Protection Program fraud:
Colorado Springs, CO Resident Charged Fraudulently Obtaining PPP Loan
A Colorado Springs resident has been indicted on charges of fraudulently obtaining more than $500,000 in PPP loans. According to IRS CI, the defendant “allegedly obtained the loans by inflating payroll costs and gross receipts and submitting fabricated tax documents and payroll reports.” The defendant is also facing charges of using PPP loan funds to cover personal expenses, including the purchase of a luxury vehicle.
Kansas City, MO Residents Charged in PPP Loan Fraud Scheme
Twelve Kansas City residents are facing charges that they conspired to fraudulently obtain $250,000 in government-backed loans through the PPP. As alleged by IRS CI, one of the co-conspirators filed multiple fraudulent PPP loan applications and then received compensation from the other co-conspirators that was paid out of their PPP loan funds.
Former IRS Agent in Oakland, CA Charged in Alleged Multi-Million-Dollar PPP Fraud Scheme
A former IRS agent has been charged with perpetrating a multi-million-dollar PPP fraud scheme alongside his brother and other defendants. According to IRS CI, the former IRS agent assisted with filing PPP loan applications on behalf of businesses that “were little more than shell companies,” and then used the funds for “significant personal expenses.”
Monroe, LA Resident Sentenced to 10 Years in PPP Fraud Case
A man from Monroe was sentenced to 10 years in federal prison in connection with “a fraudulent scheme to obtain more than $1.1 million in Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) Program loans.” As alleged in court, the defendant fraudulently “sought more than $7.6 million in PPP and EIDL Program loans and obtained more than $1.1 million” and then used the funds to cover personal expenses.
Protecting Yourself (and Your Company) Against PPP Fraud Allegations
If you have concerns about facing PPP fraud litigation, there are steps you can—and should—take to protect yourself. These steps include:
- Conduct a PPP Fraud Risk Assessment – To ensure that you are making informed decisions, you should promptly engage counsel to conduct a comprehensive PPP fraud risk assessment.
- Take Proactive Steps to Avoid PPP Fraud Litigation – If you are at risk for facing PPP fraud litigation, you should work with your counsel to proactively resolve your situation before it leads to serious civil or criminal charges. Depending on the circumstances, this may involve submitting a voluntary disclosure to IRS CI or pursuing other means of resolution.
Monitor the Government’s Efforts to Prosecute PPP Fraud
If you would like to know more about the federal government’s ongoing efforts to uncover and prosecute PPP fraud, you can follow its efforts here:
Contact an IRS Criminal Tax Attorney at Thorn Law Group for More Information
Our lawyers rely on decades of experience in high-stakes federal cases to defend individuals and businesses that are facing PPP loan fraud allegations. To discuss your situation with an IRS criminal tax attorney in confidence, call Kevin E. Thorn, Managing Partner of Thorn Law Group, at 202-349-4033 or tell us how we can reach you online now.
