Connecticut 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 emergency financial assistance to small businesses impacted by the COVID-19 pandemic. While these programs provided a lifeline to many legitimate small businesses, the rushed rollout and relaxed oversight also created opportunities for fraud. In Connecticut and nationwide, law enforcement has pursued criminal charges against individuals and businesses accused of defrauding these COVID relief programs. Several common fraudulent schemes have emerged around PPP and EIDL loans. "Loan stacking" refers to applying for multiple loans through different lenders while misrepresenting information to obtain more funds than allowed. Application fraud can include falsifying payroll, tax, or other financial information to qualify for larger loans or grants. Business owners also commit fraud by using PPP funds for prohibited personal purchases instead of approved payroll costs. Identity theft to apply for loans under someone else's name and business identity has been another problem.

Who handles PPP fraud?

Federal prosecutors treat COVID relief fraud seriously, typically charging defendants with felony offenses like bank fraud, wire fraud, mail fraud, money laundering, and aggravated identity theft. Defendants face years in prison as well as massive fines and restitution if convicted. For example, in March 2022 a Connecticut couple paid $169,000 to resolve allegations they obtained multiple PPP loans using falsified payroll expenses and then spent the money on personal purchases [3]. Hiring experienced white collar criminal defense attorneys is critical if you are being investigated for potential PPP or EIDL fraud. An attorney can carefully review the facts of your case and determine if the government has sufficient evidence to prove criminal intent versus a misunderstanding or mistake. In some cases, it may be possible to reach a civil settlement instead of facing criminal prosecution. Your lawyer can also negotiate for pretrial diversion programs or minimized charges/penalties if charges are filed.

How do you prove PPP fraud?

Some key defenses in PPP/EIDL fraud cases include:

No intent - the business owner did not knowingly provide false information and had a good faith belief they qualified for the loan amount received
Loan funds were actually used for approved purposes like payroll and rent, despite allegations
Another employee submitted inaccurate loan application without owner's knowledge
Government reviews loan application in hindsight unfairly based on updated guidance

With an experienced federal defense attorney negotiating on your behalf, potential criminal consequences from PPP or EIDL investigations can often be avoided or minimized. Do not wait to seek help if you have any concerns about a COVID relief loan received by your Connecticut business.