PPP or Paycheck Protection Program is an SBA-backed loan designed to help small businesses and startups pay eight weeks of payroll costs. It can also include mortgages, interests, rent, and utilities. Unfortunately, many people and businesses in Arizona used the loan program for their personal advantage.
Several cases have been reported in Phoenix against businesses that submit false information to file out PPP loan applications or to attempt to certify loan forgiveness. However, federal authorities for PPP loan fraud have even targeted companies in Arizona that are not involved in the scam.
Ordinarily, federal authorities or prosecutors don’t prosecute any white-collar crime unless there is a loss of a specific amount ($1,000,000) happens. This is a general rule that applies to all Arizona federal courts. However, some jurisdictions have a lower or higher amount.
If you’re a PPP loan recipient or being investigated for white-collar crime charges, you should seek legal assistance to fight your case. Only a professional defense attorney can protect your rights, freedom, and reputation.
Here is all you need to know about PPP loan fraud in Arizona.
Nine individuals in Phoenix have been charged with theft of more than $23 million in PPP monies. They were detained as a consequence of a joint investigation. Agents from Homeland Security Investigations (HSI) and U.S. Immigration and Customs Enforcement (ICE) investigated the financial fraud case and arrested the accused.
According to a press release, Mesa residents Jason Coleman, age 40, and Kimberly Coleman, age 38, made their initial court appearances on a 62-count indictment accusing them of conspiring to commit wire fraud, bank fraud, and transactional money laundering.
The indictments stated that between April 2020 and April 2021, the defendants involved in this fraud submitted or helped submit PPP loan applications on behalf of 18 firms. They asked for loans ranging from $100,000 to $2.2 million for each business.
According to the records, the defendants certified in their loan applications that each business was active and had workers for whom it paid salaries and payroll taxes. It also stated that the defendants would use the money to keep employees on staff or pay for a mortgage, lease, or utility bills. All the information presented in the loan applications was accurate and true.
Moreover, according to the indictment, Jason and Kimberly Coleman, a married couple, allegedly planned to compile and submit over two dozen phony and false PPP loan applications to obtain more than $30 million in PPP money.
To help people recover from the economic impact of the pandemic (COVID-19), the federal government handed out PPP loans to help businesses and startups pay their workers, rent, and several other cost related to the routine business they may not be able to pay otherwise due to lockdowns. Govt didn't set many balances and checks to assess the application process.
As mentioned above, it became an opportunity for many people and businesses to take advantage of the program by committing loan fraud. In many cases, individuals who didn’t have any business applied for loans and received them.
It included inmates in several prisons and jails who scammed the govt out of millions of dollars. It doesn't end here, as people who obtained the windfall from Paycheck Protection Program used the amount for their expenses, such as buying luxury cars and other extravagant purchases, instead of using it for the intended purposes.
After two years after disbursing PPP loans, the government is reviewing and looking into instances of fictitious loan borrowers' applications and spending.
Given the high profile of the fraud, the government is making efforts to rationalize its act of handing out so much money with little to no justification for it. It is aggressively prosecuting many loan recipients and businesses with the help of special prosecutors from Washington, D.C.
Misrepresentation on the loan application is the common reason that could lead you to face criminal prosecution. The misrepresentation on the loan application includes the following:
All PPP loan borrowers needed to provide truthful declarations while applying for the loan and when applying for forgiveness under penalty of perjury. Because the documents were electronically delivered, making a false declaration during the application or in the paperwork for the forgiveness could lead to accusations of wire fraud, conspiracy, or theft of public monies.
Judges have imposed greater punishment on those guilty of PPP loan fraud for abusing a system intended to assist failing enterprises.
Anyone accused of loan fraud may be subject to criminal and civil sanctions. A federal statute does not specifically cover a PPP loan fraud case, but the majority of cases are tried under the given laws:
Prosecutors use these charges for people who use electronic sources to get money by submitting false statements or promises.
Charges are utilized when some submit false statements to the bank or other financial institution to obtain money.
Using false statements in the documents or on a loan application to submit to a financial institution to qualify for the loan
The law prohibits the agreement or contract with someone to breach federal fraud laws. It is considered a federal felony.
It is worth mentioning that even if you didn't make fraudulent claims or accept cash, you could still face federal conspiracy charges.
You need to employ a skilled and seasoned lawyer who has dealt with complicated white-collar cases in the past if you’re under investigation for or have been charged with any white-collar crime relating to your application for a PPP loan.
Only qualified attorneys have in-depth knowledge of PPP loan fraud laws to help you present your case in the best light. Make sure you arrange a private consultation with your defense lawyer to explain your side of the story and work on your case details.
If a federal agent has contacted you and wants to discuss your PPP loan, get in touch with your white-collar attorney before giving any statements, as it may incriminate you or allow the government to make an example out of you.
Investigations into PPP loan fraud are now frequent nationwide. To recover money that might have been fraudulently obtained from COVID-19 assistance programs, federal prosecutors and law enforcement from different federal agencies are actively looking into possible PPP loan fraud and other CARES Act breaches. Thus, you should contact a skilled defense lawyer in Arizona to fight if you’re innocent and have been charged with PPP loan fraud.
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