New Mexico PPP – SBA – EIDL Loan Fraud Lawyers

New Mexico PPP – SBA – EIDL Loan Fraud Lawyers

The COVID-19 pandemic brought unprecedented economic disruption and hardship for small businesses across New Mexico. To provide relief, the federal government offered lifeline programs like the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) program. While these programs threw a critical lifeline to countless businesses, some unscrupulous actors saw them as an opportunity for fraud and abuse.

In New Mexico, PPP and EIDL fraud has become a major concern. With billions in pandemic aid flowing rapidly, fraudsters took advantage by falsifying information on applications, creating fake businesses, misusing loan funds, and more. State and federal authorities are now cracking down on this criminal activity through investigations and prosecutions.

Common Types of PPP and EIDL Fraud

Some of the most common PPP and EIDL fraud schemes in New Mexico include:

• Falsified information – Providing fake employee, payroll, or tax information to qualify for larger loans.
• Fake businesses – Creating shell or non-existent companies to apply for funds.
• Misuse of funds – Using loans for unauthorized personal expenses instead of approved business costs.
• Multiple applications – Applying for multiple loans through different lenders for the same business.
• Identity theft – Using stolen personal information to fraudulently apply for loans.

While the SBA attempted to verify information and prevent fraud, the rush to distribute aid meant their controls were limited. This allowed criminals to easily exploit the programs on a massive scale.

Investigations and Prosecutions on the Rise

In response to widespread PPP and EIDL fraud, federal and state authorities in New Mexico have ramped up investigations and prosecutions. The U.S. Attorney’s Office, FBI, IRS, and other agencies are pursuing criminal charges against individuals and groups engaged in pandemic loan fraud.

Some recent cases in New Mexico include:

• In October 2022, Ricky Bieniemy was charged with wire fraud and money laundering for allegedly obtaining $1.1 million in PPP loans using fake documents and shell companies.
• In August 2022, the DOJ announced charges against a Las Cruces couple accused of falsifying employment records to obtain $1.1 million in fraudulent PPP loans.
• In 2021, six New Mexico residents were charged in a scheme to obtain $650,000 in PPP loans using fake tax documents and shell companies.

These cases are just a sample of the PPP and EIDL fraud prosecutions underway in New Mexico. Officials warn there are likely many more investigations pending.

Potential Charges and Penalties

Individuals and groups accused of PPP or EIDL fraud in New Mexico face a range of potential criminal charges including:

• Wire fraud
• Bank fraud
• Money laundering
• Identity theft
• Making false statements

If convicted, penalties can be severe. Wire fraud and bank fraud charges carry sentences up to 30 years in prison. Fines and restitution may also be imposed for the full amount of the fraudulent loans obtained.

Hiring an Experienced Federal Defense Lawyer

Those charged with PPP or EIDL fraud should retain an experienced federal defense lawyer immediately. An attorney can carefully examine the prosecution’s evidence and determine if any procedural mistakes, illegal searches, or other issues could result in charges being reduced or dismissed.

In some cases, it may be possible for a lawyer to negotiate a favorable plea agreement or pretrial diversion to avoid a felony conviction. An attorney can also present mitigating factors to the judge at sentencing to help minimize penalties if convicted.

Facing federal fraud accusations is frightening, but skilled legal counsel makes a major difference. Do not delay in contacting a qualified lawyer if you are being investigated or prosecuted for alleged PPP or EIDL fraud in New Mexico. Time is of the essence in building the strongest possible defense.

Avoiding Fraud in the First Place

For small business owners applying for pandemic relief loans, it is critical to avoid any missteps that could be construed as fraud. When submitting PPP or EIDL applications, be sure to:

• Provide accurate employee, payroll, and tax documentation.
• Use loans only for approved business expenses.
• Maintain detailed records on how funds are used.
• Consult an accountant or lawyer if unsure of eligibility or use of proceeds.

Pandemic relief programs were intended to help businesses survive unprecedented challenges. Unfortunately fraud by some has tainted these programs and now prosecutors are aggressively pursuing charges. By working closely with experienced legal counsel, those facing allegations can protect their rights and build the strongest defense. For law-abiding small business owners, the lesson is to use government loans ethically and transparently.