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PPP Fraud: Forgiveness Issues Leading to Investigations in Boston

Are You At Risk for Facing a PPP Fraud Investigation in Boston? Learn About the Forgiveness Issues That Can Lead to Federal Criminal Charges

The Paycheck Protection Program (PPP) provided qualifying businesses with access to forgivable federally-backed loans during the COVID-19 pandemic. It also ended up providing numerous non-qualifying businesses and individuals with access to these loans as well. Our Boston tax fraud lawyer knows that today, federal authorities are carefully scrutinizing PPP loan recipients’ forgiveness certifications, and when a certification raises red flags, they are aggressively pursuing a wide range of federal criminal charges.

As a result, if you (or your business) received a PPP loan and submitted a loan forgiveness certification, it is important to be aware of the issues that can lead to a federal investigation. While it is possible to address forgiveness issues before a certification triggers federal scrutiny, once the government launches an investigation, avoiding unnecessary consequences becomes much more challenging.

Examples of Forgiveness Issues That Can Trigger PPP Loan Fraud Investigations

When can PPP loan recipients face scrutiny related to their forgiveness certifications? Below, our IRS criminal PPP attorney provides some examples of issues that have the potential to lead to federal charges.

Ineligibility for a PPP Loan

Individuals and businesses that were ineligible to receive PPP loans are ineligible for loan forgiveness. Even if you did not realize that your business was ineligible, our IRS criminal tax attorney knows that obtaining forgiveness for a loan secured in violation of the program’s terms can still lead to substantial penalties.

Using PPP Loan Funds for Ineligible Expenses

Businesses that used PPP loan funds for ineligible purposes are not eligible for forgiveness. This is true even if they qualified to receive a loan and submitted a valid application. Eligible expenses include payroll, mortgage interest payments, rent and lease payments, and business utilities.

Commingling PPP Funds with Personal Funds

While PPP loan recipients were not required to place their PPP loan funds into a segregated account, they were required to use these funds for eligible business purposes. As a result, if a recipient commingled loan funds with his or her personal funds, this is also considered to be a major red flag for fraud.

Failing to Document PPP Compliance

When conducting PPP loan fraud investigations, federal authorities expect loan recipients to be able to produce documentation of compliance. If you cannot substantiate your business’ loan forgiveness certification, the federal government will consider this to be evidence of fraud.

Knowingly Submitting a Fraudulent PPP Loan Forgiveness Certification

Knowingly submitting a fraudulent PPP loan forgiveness certification can lead to prosecution for tax fraud, government fraud and a broad range of other federal crimes. All of these crimes carry the potential for six or seven-figure fines and years or decades of federal imprisonment.

Speak With a Boston Tax Fraud Lawyer Today

If you need help avoiding penalties for PPP loan forgiveness fraud, we encourage you to contact us promptly. To discuss your case with an experienced Boston tax fraud lawyer in confidence, call Kevin E. Thorn, Managing Partner at Thorn Law Group at 617-692-2989.

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