Federal prosecutions against individuals and businesses alleged to have fraudulently obtained loans through the Small Business Administration’s (SBA) Paycheck Protection Program (PPP) are gaining steam across the country and within North Carolina. As white collar attorneys have anticipated since the implementation of the PPP loan initiative in 2020 in response to the economic crisis caused by the COVID-19 pandemic, the application system was ripe for abuse. At this point, there have been more than 100 defendants across the country charged federally with various types of PPP wrongdoing including bank fraud and wire fraud. Within North Carolina, there are active prosecutions in all three districts against individuals charged with fraudulent conduct related to the PPP program.
Today, the US Department of Justice announced new measures to combat schemes defrauding COVID-19 financial relief programs. The alleged loss amounts associated with current prosecutions against individuals charged with financial crimes related to the COVID-19 pandemic is reported to be over $569 million. Attorney General Merrick B. Garland and the heads of the Criminal and Civil Divisions of the Department of Justice have announced an increased effort to combat fraud in the following areas:
- Paycheck Protection Program (PPP) fraud
- Economic Injury Disaster Loans (EIDL) fraud
- Unemployment Insurance (UI) fraud
Increased prosecutions can be expected as the Department of Justice relies on the International Computer Hacking and Intellectual Property (ICHIP) program which monitors cyber-related crime worldwide to identify scammers and other online fraud.
The emergency response necessary to quickly implement these loan programs led to an assortment of questions for legitimate borrowers as well as opportunities for individuals seeking to take advantage. The unsurprising result is that both those that have committed unintentional mistakes on their loan applications and outright fraudsters are expected to be caught up in federal fraud investigations and prosecutions. If you are contacted by law enforcement or have questions about COVID relief loans you have received, contact Dysart Willis Houchin & Hubbard to discuss your case and how our attorneys can help.