CARES Act and Payroll Protection Program Fraud
In the midst of the Coronavirus pandemic, the federal Government is coming to the aid of small businesses. It is an attempt to provide some much-needed economic support at a time when everyone is suffering. Now that the money is out. The government needs to invent CARES Act Fraud cases to prosecute. Don’t be one!
The government pushes these loans at breakneck speed because people need money now. It is in the best interest of the government to get money into the economy as quickly as possible. Because of this speed, people are going to make mistakes. The government is going to make mistakes. The lack of oversight in the application process means that the government will blame you for their mistakes. The government will prosecute both the borrower and lender.
In addition to the government handing out these loans too quickly, they are unique because certain qualifying expenses including payroll costs, rent and other utilities can be forgiven. This means that lack of full documentation may result in charges.
The Payroll Protection Program is a much-needed stimulus in this time of economic upheaval. However, with the lack of oversight and the added benefit of forgiveness, there are opportunities a mistake. But it’s not fraud.
For example, the amount authorized of the loan is based on your average monthly payroll costs. But there is no clear-cut guidance as to how to calculate that number exactly. The amount of the loan that is forgivable is dependent upon the actual payment of the qualified expenses – but again, there is no clear-cut guidance as to exactly what expenses are qualified for forgiveness.
Many People on Parole or Probation are Ineligible for a Cares Act Loan. Find out how The McShane Firm can Help you.
Imagine another scenario. You take out a loan based on the calculations that you worked out for your business. Sometime after receiving the loan, you realize that there is not enough to sustain your business. So you close up shop and declare bankruptcy. The money may not have been for payment of qualifying expenses, but due to bankruptcy, the bank has no mechanism to recoup the loan. So, they will instead go after you for fraud.
Is it really fraud?
If you claim more than you are entitled to claim, or request to forgive more than you are entitled to forgive, even by innocent mistake, or declare bankruptcy soon after taking the loan, you could be facing criminal fraud charges. While the government is acting fast now to get money to small businesses, when this is all settled and it’s time to look at repayment, you better believe that the government will be trying to get back as much money as they possibly can. And at this point, it becomes more than just getting the money back. Now it is a federal criminal case, which means steep fines and jail time.
How you can save yourself:
If you have been charged with a federal crime for fraud regarding the CARES Act and the Payroll Protection Program, we can help. Our team of experienced attorneys are licensed to practice in Federal District Courts in Pennsylvania. Our law firm practices exclusively criminal defense.We are here to fight for you. Contact The McShane Firm today!
Additional recommended reading:
- Lean more about The McShane Firm
- Contact us
- Free Guide on Criminal Law cases
- ReOpen Charges
- ReOpen PA Facebook Group
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