Federal Investigators Prosecuting PPP Fraud Cases

In order to address the economic collapse caused by the COVID-19 outbreak, President Donald Trump signed the Coronavirus Aid, Recovery, and Economic Security (CARES) Act, which provides over $2 trillion in financial relief to businesses, government entities, non-profit organizations, and other negatively affected by the pandemic.  

One of the main components of the CARES Act is the Paycheck Protection Program (PPP), allocating $659 billion specifically for small businesses to keep their employees and help them quickly rebound when states allow them to reopen. However, the federal government understands how huge a pot $659 billion can be, which why they have been investigating and prosecuting alleged fraud involving PPP loans. 

To coordinate investigations related to potential PPP fraud and abuse, the CARES Act created a Pandemic Response Accountability Committee (PRAC) to oversee how federal funds are being used in various COVID-19 relief programs. This committee consists of several federal Inspector Generals, including the Small Business Administration Office of Inspector General and the Special Inspector General for Pandemic Recovery (SIGPR). 

Federal prosecutors have brought the first cases of alleged fraud related to PPP loans last month. The first federal charges were filed on May 5 against a Massachusetts man and Rhode Island man, who were accused of claiming to have dozens of employees earning a salary at four different businesses, although those employees did not exist.  

On May 13, a reality TV star was charged with bank fraud after receiving a PPP loan for his trucking business and using the funds on lavish purchases, rather than his company’s payroll and other business expenses. These recent cases demonstrate how federal investigators quickly prosecute outright fraud. 

If you are facing federal allegations for misusing PPP loan funds in Massachusetts, New York, or New Hampshire, Brad Baily Law is committed to protecting your rights and freedom. Our legal team has more than 37 years of experience handling complex criminal cases in federal court and understands what it takes to get the most favorable results on behalf of our clients. 

For more information about our firm, contact us today at (617) 500-0252 and schedule a free consultation. 


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