Mar 21, 2024

Colorado Springs PPP – SBA – EIDL Loan Fraud Lawyers

The COVID-19 pandemic led the government to quickly create relief programs like the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) program run by the Small Business Administration (SBA). These programs threw a lifeline to many businesses and workers. But the rush to get them running left the door open for lots of fraud, especially in Colorado Springs where we’ve seen many cases the past couple years.

As a Colorado Springs white collar defense lawyer, I’ve seen these cases firsthand. I want to overview the common schemes and defenses if you’re being investigated or charged.

Common PPP and EIDL Fraud Schemes

Brazen Identity Theft

Some fraudsters just outright steal people’s identities to apply for PPP or EIDL loans. That’s clearly fraud, though defendants sometimes claim they didn’t steal the identity directly but bought it from someone else.

Sneaky Schemes

“Loan stacking” is when multiple loans are applied for at the same time. “Loan splitting” divides the loan amount across applicants to bypass limits. Business owners might say funds are only for payroll, rent, etc. when they know some will go to personal use. And there’s always old fashioned document falsification.

Legal Consequences: Charges and Defenses in PPP/EIDL Fraud Cases

Federal and State Charges

Prosecutors often pursue wire fraud, bank fraud, identity theft, and money laundering charges for PPP/EIDL schemes [1]. Many cases are federal but Colorado state law on theft, forgery, computer crime, racketeering, etc. can apply too [2]. A key point is that defendants can unwittingly enter gray areas, unlike clear theft or embezzlement. So there may be chances to argue they lacked intent, were entitled to the loans, or didn’t meet technical charge requirements. Other defenses can focus on improper government conduct, entrapment, or rights violations leading to evidence suppression or dismissal.

It’s vital to get an experienced attorney to analyze your specific situation and build a customized defense [3].

Real-World Example Cases from Colorado Springs

Case Study 1: Identity Theft Ring

Some defendants allegedly worked together submitting dozens of fraudulent PPP and EIDL applications using stolen personal information from the dark web. They got over $1 million from multiple lenders, quickly laundering it through crypto and casinos. This clearly constitutes identity theft, wire fraud, bank fraud, and money laundering. However, some defendants claimed they were unwittingly recruited via social media ads promising easy money and didn’t understand the operation’s scale. While maybe still liable under accomplice theories, positioning themselves as unknowing versus masterminds could help reduce sentences [4].

Case Study 2: “Creative Accounting”

A self-employed gig worker applied for the max PPP loan based on his income, certifying it was just for payroll, rent, utilities, etc. But prosecutors found he had no payroll and just a PO box for his “office space.” He argued his income justified the full loan and he planned to expand by hiring and leasing office space later. While that didn’t happen, he claimed eligibility should be based on application info, not actual use. If reckless rather than intentional deceit is shown, charges could be dismissed or penalties reduced.

Case Study 3: Loan Stacking

A small boutique owner got a $20,000 EIDL loan from the SBA in April 2020. The next month she applied for a PPP loan without disclosing the EIDL funds. The bank caught the omission during underwriting and rejected the PPP application, referring it to authorities. She explained she didn’t read the fine print prohibiting multiple loans and thought it was okay based on friends’ advice and initial PPP rollout confusion. She can argue she lacked criminal intent and the government failed to provide clear loan stacking guidance at first. Negligence rather than deceit may warrant dismissal or leniency [5].

Conclusion: Protecting Your Rights in PPP/EIDL Fraud Investigations

These examples show some schemes and defenses in Colorado Springs PPP and EIDL cases. It’s critical to get experienced counsel to analyze your specific situation and build an appropriate defense strategy. Call my firm for a free consultation if you’re being investigated or charged related to these programs. I’ve represented many clients facing PPP and EIDL fraud accusations and understand how to effectively argue against charges or at least reduce penalties. Don’t wait as the government is aggressively prosecuting pandemic fraud cases nationwide [6]. My team and I stand ready to protect your rights.

References

[1] DOJ Charges 500+ in COVID Fraud Schemes

[2] Colorado Computer Crime Laws

[3] PPP Loan Fraud Defense Attorney

[4] $200 Billion in Potential COVID Fraud

[5] Dealing with Erroneous EIDL Loans

[6] Colorado Springs PPP/EIDL Fraud Lawyers

Colorado Springs PPP – SBA – EIDL Loan Fraud Lawyers