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The CARES Act And Paycheck Protection Program (PPP) Fraud

At the height of the COVID-19 pandemic, Congress passed several measures providing financial assistance to struggling people and businesses. Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act’s Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL), Congress set aside $350 billion for small businesses in need of loans to cover payroll, mortgage, rent and utility payments. Additional federal COVID-19 relief programs include monies for unemployment benefits, homeowner assistance and economic relief payments.

Since implementing these programs, the U.S. Department of Justice (DOJ) has made a concerted effort to ensure the proper disbursement of pandemic relief funds. In doing so, the DOJ’s Criminal Division Fraud Section and U.S. Attorneys’ offices around the country have played an active role in partnering with local law enforcement agencies in combatting fraud and abuse. As a result, federal prosecutors have brought – and continue to bring – countless charges against individuals seeking federal funds fraudulently.

I am attorney Peter Katz, and I offer experienced and proven defense in white collar criminal charges. Contact me at the Law Offices of Peter Katz by calling 609-900-2648. Your consultation is free.

Reasons Charges May Be Brought Against You

You can face federal charges for several reasons, but here are a few examples:

  • Knowingly making false or inaccurate statements on COVID benefit applications, like overstating revenues and disbursements or under- or overrepresenting the number of employees
  • Seeking PPP or EIDLs from multiple lenders
  • Pursuing PPP or EIDL monies for a fictitious business
  • Misusing funds for personal or unlawful purposes
  • Identity theft

Committing any of the offenses above can lead to severe civil and criminal penalties.

Common Charges Related To PPP Fraud

Here are some charges that federal prosecutors bring against those alleged to have committed PPP or EIDL fraud:

  • Wire fraud (Title 18 U.S.C. Section 1343): Wire fraud occurs when someone uses a form of telecommunications – like a cellphone or computer – to commit fraud. Prosecutors must prove that there was a scheme to defraud and that an interstate wire communication was used to further the scheme. A conviction of wire fraud comes with a sentence of up to 20 years in prison along with hefty fines.
  • Conspiracy to commit wire fraud (Title 18 U.S.C. Section 1349): A conspiracy charge is unique because one doesn’t have to commit the crime to face charges. Here, one only needs to “conspire” to violate federal law. One faces the same penalties as if they were to have committed the offense, so with this charge, the same sentence and fines for wire fraud apply.
  • Aggravated identity theft (Title 18 U.S.C. Section 1028(a)): One faces this charge if they knowingly transfer, possess or use, without lawful authority, a means of identification of another person. A conviction of aggravated identity theft comes with a mandatory minimum sentence of two years, which must run consecutive to any other term of imprisonment.
  • Bank fraud (Title 18 U.S.C. Section 1344): A bank fraud charge requires one to knowingly or attempt to execute a scheme or artifice to defraud a financial institution or obtain any of the moneys, funds, credits, assets, securities or other property owned by or under the custody or control of a financial institution by means of false or fraudulent pretenses, representations or promises. One can face up to 30 years in prison and hundreds of thousands of dollars in fines.
  • False statements to a financial institution (Title 18 U.S.C. Section 1014): This crime occurs when one knowingly makes false statements or willfully overvalues any property or securities to influence a bank or government agency. Upon conviction of making false statements, one can face nearly 30 years in prison and extensive fines.
  • Fraud in connection with major disaster or emergency benefits (Title 18 U.S.C Section 1040): After Hurricane Katrina in 2007, Congress sought to curb fraud and abuse when people were wrongly applying for disaster aid. They did this by passing the Emergency and Disaster Assistance Fraud Penalty Enhancement Act, which created a new criminal offense for those who knowingly engage in fraud or make a false statement involving a benefit paid out for disaster relief. Upon conviction, one can face upward of 30 years in prison.

Given the vigor in which federal law enforcement and prosecutors seek to punish those alleged to have fraudulently applied or obtained PPP funds, the need for defense counsel is clear.

Work With An Attorney To Get Full Protection

As a defense attorney who has years of prosecution experience, I can address any questions and concerns you have. If you have been arrested, I can begin preparing a bail package and your defense. I am well aware of how federal law enforcement agencies operate. I use my knowledge and experience to advocate on your behalf effectively. Call 609-900-2648 or email me your contact information to arrange a free consultation. At my firm, the Law Offices of Peter Katz, I serve clients in New York and New Jersey.