When we went into lockdown early in 2020 due to the COVID-19 pandemic, Congress and the president passed the CARES Act to provide economic relief and support to small businesses and everyday citizens. As part of that relief package, Congress created the Payroll Protection Program (PPP). This program was intended to give small businesses forgivable loans if the money was used to maintain payroll (pay their employees to avoid laying them off or furloughing them) and to pay for certain costs of the business, such as rent, utilities, etc.

What Then Is Considered PPP Fraud?

The Department of Justice has started prosecuting cases of PPP fraud, which occurs when a business owner or person sees an opportunity to get free money by submitting fraudulent paperwork. The amount of funds given to each business depends on their payroll (or how many employees they had) and how much they paid those employees, as well as their business costs. One of the ways people have tried to defraud the government and receive more money than they’re entitled to is by reporting that they had more people on payroll than they really did. If a small business with just two employees falsified documents to show they have ten, they’ve almost quadrupled the amount of money they’re entitled to under the PPP. The employer could also claim they pay each employee $5,000 per month, when they really only pay $3,000, and increase the amount they will receive from the PPP even more.

Another way they could defraud the government is through their business expenses (rent, utilities, mortgage, etc.). A company could claim to pay $3,000 a month for their commercial space when they really only pay $1,000. Again, the company would increase the amount of money it’s potentially going to receive from the PPP. If you falsify documents and lie about your employees and expenses to receive more funds through the PPP, you’re committing a fraud. These are the types of cases that will result in federal indictments.

What Should I Do If I Am Being Investigated for a PPP Fraud?

The number one thing to remember is to not talk to any law enforcement investigators without first consulting an attorney. Most of these investigations begin by a federal law enforcement agent (from the FBI, Secret service, treasury department, or Homeland Security) either calling you or showing up at your house or work. If that happens, you need to contact an attorney right away. You should not talk to the agent without first talking to an attorney.

If you committed fraud with someone else, that person might start calling you and asking you to meet or talk in detail about what you’ve done. This is a strong indication that your partner has already been contacted by a law enforcement and is now working for them as a government informant. They’re trying to set you up. If that happens, do not discuss anything with them and contact an attorney right away.

For more information on PPP Loan Fraud in Florida, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling 305.791.6529 today.