In these times of uncertainty many small businesses are thankful to receive government assistance to help retain their employees and keep their business afloat. On March 29 2020, the government responded to the growing concerns of business affected by COVID-19 by passing the CARES Act. This Act is a federal law that provides emergency financial assistance to Americans who are suffering economic hardships due to COVID-19. One of the forms of relief that this Act provides is $349 billion dollars in forgivable loans to small businesses. The money issued from these loans is required to be spent on job retention and other authorized business expenses designated in the loan such as payroll costs, interest on mortgages, rent and utilities. In April 2020, Congress approved an additional $300 billion dollars designated towards PPP loans (Paycheck Protection Program).
The PPP loan is extremely beneficial to small businesses since the loan has a maturity of two years with an interest rate of one percent. If the small business uses the proceeds of the loan on the designated approved expenses within the two-year period, the interest and principal of the loan are forgiven.
PPP Loan fraud scheme
On August 6, 2020 the Department of Justice published a press release detailing arrests that were made of individuals who are allegedly involved in a PPP Loan fraud scheme. Detailed in the press release, Attorney General Brian C. Rabbit reported “The department and our law enforcement partners will continue to aggressively pursue those who would seek to illegally exploit the ongoing national emergency for their own benefit.” Furthermore, he stated, ““The Justice Department will continue to work long hours with our federal, state, and local partners to finding and prosecuting those who may have defrauded the public of funds meant to help the American economy recover from this once-in-a-century catastrophe.” The FBI and law enforcement partners have announced that they are tasked with the mission to pursue frauds of monies received through the CARES Act, investigate and fully prosecute these violations.
If you find yourself in the unfortunate position of being a target or a person of interest in a criminal investigation involving PPP fraud, it is important to have the right criminal defense attorney who has experience in these matters and knows how to protect your rights. On the other hand, if the government has not labeled you as a target or person of interest but has served you with a subpoena and/or search warrant, you must make sure that to have an attorney to ensure that the government has the proper authority to conduct these investigations have a dedicated attorney that can be with you every step of the way to ensure the government is not abusing its power.
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