The government launched a Paycheck Protection Program as part of the coronavirus recovery plan to aid and reduce financial burdens. The paycheck protection program plays an essential role in providing financial relief to affected parties. You need to understand what Paycheck protection program fraud is and where you can get the right lawyers to find justice for you.
What is Paycheck Protection Program Fraud?
You will be shocked by how people and businesses have failed to uphold the paycheck protection program’s diligence levels. There are many fraudulent reports related to the paycheck protection program, which are now populating the news today.
People are now signing in fake companies to apply for this funding. Such activities are fraud and violations of the set PPP protocol. Any illegal activity related to this program is a fraud, and the government has taken severe measures to ensure that financial aid is given to the right people.
Type of PPP Frauds
1. PPP loan Application Fraud
After the government provided this financial aid, they outlined different eligibility criteria. However, some companies have misrepresented their information to take advantage of this funding. People are now giving wrong info and creating fake companies.
The criteria clearly stated that the companies that qualify should have 500 fewer employees. Any company misrepresenting such information is considered as fraud. You will find out in the reports that companies have been faking their employees and classifying them as independent contractors to get this money.
Other companies have been changing the payroll costs to increase the loan amount offered under PPP. Small business administration had clearly stated that the companies would receive loans in amounts that add up to two months of the average payroll plus 25 percent.
2. More than one application
It has come to the national government’s attention that other companies have even receiving PPP funds from more than one lender. This fraud is common where business owners classify their business in various categories to qualify for different PPP funding types.
3. Loan certification fraud
The above criteria were the only one that qualifies companies to get Paycheck protection program money when applying for this money. The companies were required to use and give the right information. Any fake documents or false information is regarded as a fraud, and the government has set measures and rules for such activities.
4. Lender due diligence
Other frauds can involve the lenders when they don’t fulfill the set Small business administration minimum requirements. These cases arose when the lender obtained the required borrower certifications when confirming that the borrower paid meets the specified criteria. Also, fraud can be when analyzing the average monthly payroll costs. If the lender does not check and verify such conditions, then there are higher chances of fraud.
5. Using PPP funds for the wrong purpose
The federal government decided to give financial support to business owners to cover payroll costs, including befits. It means that when you use this money for personal gain, such an act is considered fraud.
Moreover, this money was meant to pay any interest on mortgage obligations, pay rent, pay for utilities, and other expenses under the law’s set debts. After receiving the Paycheck protection program funds, business owners must provide proof and comply with the specified conditions.
The companies are also required to document all payments made for all eligible and none legible expenses. In the case of a federal audit or investigation, it will be straightforward to support your expenditure plan. These rules are set to prove that the government intends to use money given to fund businesses and no other purposes.
Misrepresenting information during an audit can lead to the company being pressed under investigation and facing significant charges. In this case, you will need a lawyer to represent your company and proof that you have met all set standards by the government.
Paycheck Protection program audit
The federal government takes time to investigate whether the borrower has prepared all necessary documents required by the SBA office. If the government finds out that you have not met all the set standards during the audit, your company will be answerable.
What to do when facing PPP Fraud Charges
It’s evident that when facing such charges, you need to speak with a federal defense attorney to represent you and find a viable solution for you. Before hiring and spending money on professional Paycheck protection program lawyers, you need to do extensive research and chose one with a high reputation.
You need such a lawyer when the bank is reporting PPP loan fraud to the government. Suppose the corporate audits are discovered to have PPP loan fraud. There are also lawyers dealing with penalties for PPP loan fraud and loan repayment requests.
It will do you right to choose a law firm with professional lawyers devoted to helping you with your case. These frauds can cost your business a lot of money; therefore, all you need is a good representation to get the job done.
PPP fraud accusation is a serious matter that needs immediate action, which can be done by professional lawyers. They will protect your business before applying for a paycheck protection program, ensuring you remain on the right side of the law.