Covid-19 and PPP Fraud Prosecutions Update

Covid-19 and Payroll Protection Program Fraud Prosecutions Update

Happy Friday, everybody. I wanted to talk to you a little bit today about the Payroll Protection Program and some prosecutions that are going to continue to come down the pipe from the DOJ as this COVID situation continues, as we start to inch our way back to normalcy. The DOJ and the FBI have teamed up, they’ve created this task force and this task force has indicated that they are going to aggressively pursue any companies, businesses or individuals that they think have attempted to or actually have defrauded the government out of these relief funds for whether it’s the Payroll Protection Program or some other federally funded aid or benefit package. We saw a huge wave of these prosecutions come after Katrina, come after 9/11. Any time the government steps in and offers these aid packages, you will undoubtedly have individuals that seek to take advantage of that and to line their own pockets, so to speak.

So the first set of these prosecutions has already begun. We’ve seen criminal complaints coming in from New York, California and other federal jurisdictions, where people have been either indicted or have been sent up to the grand jury level for investigation on these fraud actions. We saw another development a couple of days ago, where several Wall Street banks were served subpoenas for information for financial documents in an investigation that is supposedly linked to the Payroll Protection Program. There is an investigation ongoing, obviously the names of the companies haven’t been released. They’re looking into the DOJ and the FBI is looking into companies who they say have defrauded the federal government by submitting false information on their application for Payroll Protection Program loans.

So there is this investigation undergoing there, but there’s also some other information that’s coming out in which some different safe harbors or what we call safe harbors have been established for different borrowers of payroll protection money. So this is all incredibly nuanced. It’s changing literally by the hour in some instances. So if you or anybody you know took out payroll protection money, and you’re concerned, whether it’s you answered a question on the form and you might have omitted some information or you were less than truthful on that information, you have reason to be concerned. Contact a criminal offense attorney like me, like somebody else that does this type of work and run it by them. Because there are ways that you might be able to avail yourself of the say, whether it’s a safe harbor, whether it’s a disclosure, whether it’s a clawback or a payback of the funds. There are ways that we can protect you that will typically avoid a larger, more expensive federal prosecution down the road.

There’s also ways that we can work with you to try to figure out what the best game plan is going forward. Because one of the things that the DOJ has said they’re going to continue doing is they are going to aggressively pursue audits of companies or audits of individuals and subpoenas of individuals looking for this type of fraudulent activity. So if there is a likelihood that you or your business gets served with one of these subpoenas or gets hit with one of these audits, if that is the case, even if it’s not something you’re worried about, it’s still in your best interest to contact a lawyer, whether it’s me or otherwise, that has dealt with these federal subpoenas before, that has dealt with these federal audits before, because they are very complicated.

Knowing how to answer that subpoena is crucial. Knowing what documents are required, they have to be produced in a very specific format. They have to be dates labeled. It’s a very tedious process, but it’s one that we’re familiar with. So if you get served any type of legal documentation from the United States government, please, please, please, please give me a call. Give me an email. Ask, “Hey, can you look at this?” I’d be happy to look at it. The consultation’s absolutely free. So I don’t mind looking at something and tell you whether or not that’s something that you need to worry about or that’s something you don’t need to worry about. That’s what I’m here for.

So as we continue on, as you get back to work, as your company starts to open up and try to get back on your feet, if you see anything like that, please give me a call. I’m here to help in any way, shape or form that I can. I hope everybody’s doing well out there. I look forward to keep bringing you these videos once a week, every once in a while, or hopefully soon, I’ll be able to get rid of this quarantine hair, have a really actual haircut when I’m back in the office. So we’re looking forward to getting back to some set of normalcy. I hope you are too. Meanwhile, stay safe, keep your family safe. And if you have any questions, please reach out. I’m happy to talk to you. Thank you and I’ll see you all next week.