As part of the Coronavirus Aid, Relief and Economic Security (CARES) Act, Congress authorized the Small Business Administration to create the Paycheck Protection Program (PPP), which offers eligible small businesses up to $10 million in forgivable loans to cover specified business expenses. Since its authorization, federal authorities have reported a large number of attempts to secure PPP loans through fraud, and the United States Attorney’s Office for the Southern District of Florida has dedicated considerable resources to investigating and prosecuting this type of criminal activity.

On March 26, 2021, Ariana Fajardo Orshan, the then-United States Attorney for the Southern District of Florida, announced an update on the efforts to prosecute CARES Act fraud, along with Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division and representatives from local law enforcement agencies.

As of the date of the announcement, the South Florida U.S. Attorney’s Office had filed a total of 38 COVID-19 financial fraud cases, totaling over $75 million of alleged fraud. These cases have involved various criminal activities, including business owners exaggerating their payroll expenses to qualify for larger loans and criminal operations submitting loan applications and supporting documentation in the names of many different businesses.

Some of the charges filed include:

• Wire fraud
• Bank fraud
• Money laundering
• Identity theft
• Conspiracy to defraud the United States
• Conspiracy and attempt to commit wire fraud and bank fraud

The wide range of charges speaks to the variety of forms that PPP fraud can take. In fact, anyone who obtains a PPP loan for an ineligible company, attempts to receive funds they are not entitled to or seeks loan forgiveness for misspent PPP funds can end up facing federal criminal charges.

Some common examples of PPP fraud involve:

• Overstating your payroll costs to receive a larger loan
• Falsely claiming that the pandemic impacted your business negatively
• Claiming your business has fewer than 500 employees when it actually has more
• Spending PPP money on non-qualified expenses and then applying for forgiveness for those misspent loan funds

The Law Office of Roma W. Theus, II, P.A. is well-versed in federal law and has defended a broad range of white-collar criminal cases in Florida and elsewhere in the country. If you have been charged with PPP fraud or suspect that you are being investigated, please call 954.281.4851 or contact me online to request a consultation at my Wellington office.