Michigan PPP – SBA – EIDL Loan Fraud Lawyers

Michigan PPP – SBA – EIDL Loan Fraud Lawyers

The Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) program were created by the federal government to provide financial relief to small businesses during the COVID-19 pandemic. However, some business owners and individuals have taken advantage of these programs by committing fraud to obtain loans or loan forgiveness.

In Michigan, PPP and EIDL fraud is on the rise, with several high-profile cases being prosecuted by the Department of Justice (DOJ). If you are being investigated or charged for PPP or EIDL fraud, it is critical that you seek legal representation from an experienced lawyer. Federal prosecutors take these cases very seriously, and the penalties for conviction can be severe.

Overview of PPP and EIDL Loan Programs

The PPP was established under the CARES Act in March 2020. It authorized up to $349 billion in forgivable loans to small businesses to cover payroll, rent, utilities, and other expenses. In April 2020, Congress approved over $300 billion more for PPP loans. The loans have a 1% interest rate and are fully forgivable if at least 60% of the funds are used for payroll costs.

The EIDL program, administered by the Small Business Administration (SBA), provides low-interest loans of up to $2 million to businesses experiencing temporary loss of revenue due to COVID-19. EIDL loans have up to a 30-year term and a 3.75% interest rate.

Types of PPP and EIDL Fraud

While the PPP and EIDL programs have provided a lifeline for many businesses during the pandemic, the large amounts of money involved have also attracted fraudsters seeking to take advantage. Some common schemes include:

• Falsifying information on loan applications such as number of employees, payroll expenses, cost of goods sold, and company revenues.
• Using loan proceeds for unauthorized purposes – the funds are required to be used for specified expenses like payroll, rent, utilities, etc.
• Claiming fake employees – adding phantom employees to payroll to increase loan amount.
• Identity theft – using another individual or company’s information without authorization to apply for loans.
• Multiple loans – applying for and receiving loans from multiple lenders.
• Falsifying records to show compliance with program rules and qualify for full loan forgiveness.

Major PPP and EIDL Fraud Cases in Michigan

Federal prosecutors in Michigan have been aggressively pursuing PPP and EIDL fraud cases. Some notable examples include:

• A Commerce Township man pleaded guilty to stealing $851,000 in PPP and EIDL loans. He submitted nine fraudulent loan applications using fake documents and false information.
• Six people from the Detroit area were charged with a scheme to obtain $2.5 million in PPP loans using falsified documents. They spent the money on luxury purchases.
• A Shelby Township man was charged with fraudulently obtaining over $2.5 million in PPP and EIDL loans and using the money to buy real estate, luxury vehicles, jewelry and other personal items.
• The owner of a Farmington Hills medical clinic was charged with fraudulently obtaining $3.1 million in PPP and EIDL loans and using the proceeds for personal expenses.

Penalties for PPP and EIDL Loan Fraud

The consequences for PPP or EIDL loan fraud can be severe. Potential penalties include:

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• Up to 30 years in federal prison for major fraud cases.
• Fines of up to $1 million for individuals and $10 million for businesses.
• Restitution to repay the fraudulently obtained funds.
• Exclusion from all federal contracts and programs.
• Civil lawsuits by the DOJ under the False Claims Act with treble damages.
• Forfeiture of assets obtained with the fraudulent loan proceeds.

Defenses in PPP and EIDL Fraud Cases

Some possible defenses in PPP or EIDL fraud prosecutions include:

• Lack of intent – the business owner did not knowingly or intentionally commit fraud. Mistakes were made unintentionally.
• No false statements – the alleged false statements were actually true, or immaterial errors that do not constitute fraud.
• Compliance with rules – the loan funds were used for permitted purposes and records show program compliance.
• Return of funds – the accused has paid back the full loan amount plus interest and penalties.
• Statute of limitations – the 5-year statute of limitations for federal fraud crimes has expired.
• Entrapment by government informants who pushed the business owner into fraudulent conduct.

Why You Need an Experienced Federal Defense Lawyer

Facing federal prosecution for PPP or EIDL fraud is an extremely serious matter that can result in substantial prison time and massive financial penalties if convicted. It is absolutely critical to have an experienced federal defense lawyer on your side from the very beginning of the investigation.

A knowledgeable attorney can carefully examine the evidence and determine if you have valid defenses. In some cases, it may be possible to prevent charges from even being filed. If you do get charged, your lawyer can negotiate with the prosecution for a favorable plea agreement or defend you through trial.

Don’t take chances with your future and livelihood. Contact a top PPP/EIDL fraud defense lawyer for a free case review and legal strategy consultation. With an aggressive legal advocate on your side, you can avoid the harshest outcomes and protect your interests.

What to Do If You Are Under Investigation for PPP/EIDL Fraud

If you receive a subpoena, visit from federal agents, or target letter indicating you are under investigation for PPP or EIDL fraud, here are crucial steps to take:

• Remain silent – Do not answer questions or provide statements to investigators without your lawyer present. Assert your right to have counsel.
• Gather records – Secure all documents related to your PPP or EIDL loans, loan applications, payroll, business expenses, bank accounts, taxes, etc.
• Hire a lawyer – Retain an experienced federal defense attorney to represent you. Ask about PPP/EIDL defense experience specifically.
• Follow legal advice – Strictly adhere to your lawyer’s instructions for responding to investigators. Do not communicate directly with law enforcement.
• Avoid obstruction – Be cooperative with authorities without incriminating yourself. Obstruction creates additional charges.
• Get character references – Ask associates, employers, clients to provide written letters vouching for your honesty and integrity.

Choosing the Right PPP/EIDL Fraud Lawyer

With so much at stake, it is imperative that you select the right lawyer to defend you against PPP or EIDL fraud allegations. Key credentials to look for include:

• Federal court experience – Extensive practice defending complex white collar cases in federal courts.
• Fraud case expertise – In-depth knowledge of federal fraud statutes and case strategies specific to PPP/EIDL allegations.
• Negotiation skills – Proven ability to negotiate favorable plea deals and settlements with federal prosecutors.
• Trial record – Skill in arguing and presenting fraud cases to judges and juries.
• Resources – Sufficient support staff, forensic accountants, and investigators to thoroughly prepare your defense.
• Credentials – Graduated from a top law school. Member of the National Association of Criminal Defense Lawyers. 10+ years handling federal fraud cases.
• Client reviews – Numerous positive reviews from former clients facing white collar prosecutions.

Questions to Ask a Potential PPP/EIDL Fraud Lawyer

Here are some key questions to ask when interviewing prospective lawyers:

• How much experience do you have defending PPP and EIDL fraud cases specifically?
• What are the most common mistakes you see people make when under investigation?
• What steps will you take immediately upon being retained for my defense?
• How often have you negotiated reduced charges or non-prosecution agreements in fraud cases?
• Are you willing to take my case to trial if necessary? What is your trial record?
• How frequently do you communicate with clients about case developments and strategy?
• Can you provide references from past clients who faced similar federal fraud allegations?

Red Flags to Watch Out For

Be wary of lawyers who:

• Guarantee they can get charges dismissed or avoid prison time. Ethical lawyers won’t make such bold assurances.
• Push for a quick plea deal before thoroughly examining the evidence.
• Seem unfamiliar with PPP or EIDL program rules and regulations.
• Fail to ask questions and demonstrate limited interest in the specifics of your case.
• Lack malpractice insurance.
• Demand large upfront retainers before providing any meaningful work on your case.
• Have no reviews or all negative reviews from former clients online.

Conclusion

Getting ensnared in a federal investigation or prosecution for PPP or EIDL loan fraud can have devastating professional and personal consequences. Your future liberty, finances, and reputation are all on the line.

Do not leave anything to chance. Retaining an elite white collar defense lawyer with specific experience defending PPP and EIDL fraud allegations in federal court is an absolute must. With an expert legal advocate aggressively defending your rights, you will have the best possible chance of avoiding harsh penalties and emerging with your finances and freedom intact.