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Boston PPP Fraud

Under Investigation or Facing Charges? Get Help from an Experienced Boston PPP Fraud Lawyer

While the Paycheck Protection Program (PPP) helped many businesses survive the economic impacts of the COVID-19 pandemic, it also proved to be a prime target for fraud. Studies suggest that as much as $80 billion of the $800 billion in federally-backed loans issued under the PPP may have gone to individuals and businesses that did not qualify. As a result, fraud under the PPP has been called the biggest in a generation, and many loan applicants and recipients are now finding themselves in need of an experienced Boston PPP fraud lawyer.

Allegations of PPP fraud can have serious consequences. The Internal Revenue Service’s Criminal Investigation Division (IRS CI) and the U.S. Department of Justice (DOJ) are working relentlessly to target and prosecute those suspected of committing fraud under the program. Prosecutions are leading to a wide range of federal charges, all of which carry the potential for substantial fines and prison time.

Experienced Federal Defense Counsel for PPP Fraud Cases in Boston

Our IRS criminal PPP attorney represents individuals and businesses in PPP fraud cases in Boston. If you are dealing with an IRS audit and your company obtained a PPP loan, or if you are facing an investigation related to a PPP application or forgiveness certification, we can help you execute a targeted and strategic defense. When you contact us, we will arrange for you to speak with a Boston PPP fraud lawyer promptly, and your lawyer can interface with the IRS, IRS CI or the DOJ on your behalf immediately if necessary.

What is the Paycheck Protection Program (PPP)?

The Paycheck Protection Program (PPP) was a federal COVID-19 relief program established under the Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020. It provided eligible businesses with access to forgivable, low-interest government-backed loans in two phases—an initial phase in 2020 that provided access to $349 billion in funding and a second phase in 2021 that brought the total amount of PPP relief funds to approximately $800 billion.

Congress enacted the CARES Act as a piece of emergency legislation designed to provide a quick infusion of capital into the economy. As a result, the qualifications for eligibility were limited, and the criteria for obtaining a loan were non-restrictive.

While this made it easy for struggling businesses to obtain PPP loans, it also made it easy for non-qualifying individuals and businesses to engage in fraud. The PPP was flooded with fraudulent applications during both phases and while the federal government eventually started putting rules in place to mitigate PPP fraud, these rules proved to be too little too late. Many non-qualifying applicants received PPP loans (including multiple loans in some cases), and today, IRS CI and the DOJ are in the process of holding these individuals and businesses accountable.

What Types of Conduct is the Government Investigating?

The federal government is actively targeting all forms of fraud under the Paycheck Protection Program. This includes fraud during the application process and fraud related to loan forgiveness. To obtain loan forgiveness, PPP recipients must not only have been eligible for the loans they received, but they must also have used their PPP funds exclusively for authorized purposes.

As a result, both successful and unsuccessful PPP loan applicants need to be concerned about facing scrutiny from IRS CI and the DOJ. Some examples of the types of conduct these federal authorities are targeting include:

  • Submitting PPP loan applications that contain falsified payroll information and other misrepresentations and omissions
  • Falsifying payroll records, tax returns and other documents to support fraudulent PPP loan applications
  • Making false statements to PPP lenders, Small Business Association (SBA) representatives and other federal agents
  • Using PPP loan proceeds for unauthorized purposes (i.e., purposes other than payroll expenses, mortgage interest payments, rent or lease payments, or utility payments)
  • Fraudulently certifying compliance with the terms of the PPP in order to secure loan forgiveness

While the PPP closed in 2021, IRS CI and the DOJ are still actively reviewing PPP loan application files from 2020 and 2021. They are also scrutinizing PPP loan recipients’ forgiveness certifications—including both certifications already submitted and new certifications filed on an ongoing basis. This means that all PPP loan applicants and recipients are at risk for facing scrutiny, and while business owners who complied with the program’s terms (or did their best to do so) should not be at risk for criminal prosecution, facing an audit or investigation still requires a proactive and strategic defense.

Information on the Federal Agencies Involved in PPP Fraud Enforcement

Along with the IRS CI and the DOJ, the SBA and the Federal Bureau of Investigation (FBI) are also involved in investigating and prosecuting individuals and businesses for PPP fraud. Here is some information about each of these federal entities:

  • Internal Revenue Service Criminal Investigation (IRS CI) – IRS CI is the criminal enforcement arm of the nation’s revenue collection agency. Falling under the U.S. Department of the Treasury, IRS CI has substantial investigative authority, including the authority to issue and obtain subpoenas in support of its investigative efforts. While IRS CI is predominantly focused on tax fraud, its investigations regularly lead to charges for other white-collar federal crimes as well.
  • U.S. Department of Justice (DOJ) – The DOJ is the nation’s top law enforcement agency. It works alongside other federal authorities such as IRS CI, the SBA and the FBI to gather the evidence needed to secure indictments and pursue prosecution of individuals and businesses in federal district court. The DOJ has U.S. Attorney’s Offices throughout the country, including an office in Boston.
  • Small Business Administration (SBA) – The SBA was largely responsible for overseeing the administration of the Paycheck Protection Program. As such, it has a significant interest in seeing that those who committed fraud under the program are held accountable. The SBA’s Office of Inspector General (OIG) works alongside its law enforcement partners to conduct exhaustive investigations focused on uncovering conspiracies, fraud and other related crimes.
  • Federal Bureau of Investigation (FBI) – The FBI has called PPP fraud a “threat[] to the United States homeland.” It is actively involved in many PPP fraud investigations as well, with Special Agents lending their expertise and the agency’s resources to help uncover and prosecute fraud on all scales.

If you or your business applied for a PPP loan and you have been contacted by any of these agencies, you should consult with a Boston PPP fraud lawyer promptly. By the time you find out that you are under federal investigation, the investigation is already well underway. However, there are a variety of ways to fight PPP fraud allegations, and, while you may be at risk for substantial penalties, you may be able to avoid unnecessary consequences by engaging experienced defense counsel.

FAQs: Defending Against Allegations of PPP Fraud in Boston

How do I know if I am under investigation for PPP fraud?

Oftentimes, targets of federal investigations will not find out that they are being targeted until they receive a subpoena or federal agents show up at their door. If either of these events has happened to you, it is important that you contact a Boston PPP fraud lawyer right away. But, even if you haven’t yet been contacted by federal agents, you could still be at risk, and addressing your concerns proactively will provide the greatest opportunity for a best-case outcome.

What should I do if I am under investigation for PPP fraud?

If you are under investigation for PPP fraud in Boston, you need to be very careful. To avoid costly mistakes, you should speak with a Boston PPP fraud lawyer as soon as possible. Your lawyer can explain what to do (and what not to do) during the government’s investigation, and your IRS criminal tax lawyer can deal with the investigating agents on your behalf.

What should I do if I improperly obtained a PPP loan and am not yet under investigation?

If you are concerned that you could become the target of a PPP loan fraud investigation, this is also a scenario in which you should seek legal advice promptly. If you are not yet being targeted, you may have options for correcting any past mistakes without triggering federal scrutiny.

What can a Boston PPP fraud lawyer do to help me?

Whether you are under investigation or have concerns about facing a PPP loan fraud investigation, there are lots of ways an experienced Boston PPP fraud lawyer can help you. Your lawyer can help ensure that you are making informed decisions, and if necessary, your IRS criminal PPP lawyer can work with the federal government to steer your case toward a favorable resolution.

Request a Confidential Consultation with Boston PPP Fraud Lawyer Kevin E. Thorn

If you need to know more about protecting your business (or yourself) against PPP loan fraud allegations, we invite you to get in touch. To request a confidential consultation with Boston PPP fraud lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group, please call 617-692-2989.

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