Almost immediately, reports of fraud captured the headlines. Numerous individuals and businesses submitted false and fraudulent applications for PPP loans. The Department of Justice (DOJ) and the Office of the Inspector General (OIG) have been aggressively investigating and prosecuting PPP fraud charges.
If you or a loved one has knowledge about fraudulent claims related to coronavirus aid, our attorneys can help. We know that coming forward with allegations of fraud against an employer or associate may be difficult, but we can help protect you from retaliation and, in some cases, get you a portion of the government’s recovery under a qui tam suit. Contact our office today at (844) 627-3529 to discuss your legal options.
Paycheck Protection Program and the CARES Act
The CARES Act provided over $2 trillion of economic relief to individuals and small businesses as mandatory shutdowns caused by the novel coronavirus began to deeply impact the economy. The CARES Act included direct Economic Impact Payments of $1,200 to adults making less than $99,000 and up to $500 per child.
In addition to stimulus payments, the CARES Act provided several measures to assist small businesses in covering overhead and maintaining their payroll. $659 billion was authorized for the Paycheck Protection Program, which gave loans through the SBA. PPP loans have an interest rate of 1%, and small businesses meeting specific qualifications are eligible for loan forgiveness.
Small business owners were also able to apply for Economic Injury Disaster Loan advances of up to $10,000 and apply for a number of tax credits as part of the CARES Act.
The CARES Act was explicitly designed to provide relief for those hit hardest by COVID-19, including sole proprietors, non-profit organizations, and small businesses meeting the SBA’s size standards.
Types of PPP Fraud
PPP fraud can take many different forms. Current fraud investigations filed by the DOJ and OIG include:
- Submitting a fraudulent PPP loan application
- Falsifying tax documents
- Applying for multiple PPP loans
- Misrepresenting an economic hardship created by COVID-19
- Falsifying a loan forgiveness application
- Misuse of PPP funds
The Department of Justice recently announced federal bank fraud and wire fraud charges against a Texas entrepreneur who allegedly submitted fraudulent PPP loan applications obtaining over $1.6 million for two entities that neither had the employees claimed on the application nor the payroll expenses.
A Florida resident was charged with wire fraud, healthcare fraud, making false statements to a financial institution, money laundering and conspiracy after federal investigators found evidence that he fraudulently obtained PPP and other COVID-19 relief funds by charging his clients “thousands of dollars for chiropractic services under false pretenses.”
These are only two of the dozens of ongoing investigations related to COVID relief fraud. The Pandemic Response Accountability Committee provides oversight and publishes information related to these cases.
Fraudulent Use of PPP Funds
One of the most common forms of PPP fraud is the misuse of funds. Not only do people falsify documents to obtain the loans, they then use the fraudulently obtained loan proceeds for their own personal benefit. Economic relief through the CARES Act was designed to help those most significantly impacted by the novel coronavirus. Under the Act, funds must be used for payroll costs, mortgage interest payments, rent, or utilities.
The Department of Justice announced a 10-count indictment against a Virginia man who allegedly fraudulently obtained $190,000 in COVID-19 relief funds and then converted approximately $140,000 of those proceeds into cash or cashier’s check for his own personal gain.
Other indictments throughout the country allege that PPP proceeds were used to make lavish personal purchases, including sports cars, real estate, and jewelry. Regulatory agencies continue to crack down on these abuses and rely on tips from private citizens to vigorously prosecute these cases.
Federal law protects individuals who report fraud and may provide compensation for your information. Whistleblowers who have intimate knowledge or evidence about an entity’s attempt to defraud the government may be eligible to receive a portion of the government’s recovery through a qui tam suit under the False Claims Act. Many federal fraud charges are brought under 31 U.S.C §§ 3729 – 3733, the False Claims Act (FCA). The FCA allows private citizens to file a lawsuit on behalf of the government and may entitle them to up to 30 percent of the recovery.
Retaliation against a person who reports fraudulent behavior is unlawful. Employees who bring whistleblower claims are protected by state and federal law from retaliatory firing or punishment. Under the Florida Statutes, both public and private sector employees are protected from being discharged or discriminated against for disclosing or threatening to disclose any violation or suspected violation of federal, state, or local law, rule, or regulation. (Fla. Stat. § 112.3187 and Fla. Stat. § 448.102)
At Mase Mebane Seitz, our Miami PPP fraud attorneys will ensure that you are protected under whistleblower statutes. We know that you are taking risks coming forward, but your honesty and integrity are protecting millions. Whether you have knowledge about your employer’s misuse of funds or someone’s false PPP application, our lawyers can help. Call today for more information and to report COVID relief fraud to the proper authorities.
Coronavirus Stimulus Fraud
As soon as stimulus payments were announced, reports of fraud began to emerge. People posing as Treasury Department representatives began calling individuals asking for personal financial information or claiming they needed an advance fee, fraudulently obtaining thousands of dollars from those who needed it most.
As reported by the U.S. Department of Treasury, stimulus fraud can occur via phone, email, or U.S. Postal Service. If you believe that you are the victim of coronavirus stimulus fraud or have witnessed a form of fraud, you may be entitled to compensation. We can assist you in filing the proper claims and obtaining recovery.
Common forms of stimulus fraud include:
- Healthcare fraud
- Fake check scams
- Cryptocurrency fraud
- Offers to sell fraudulent Personal Protection Equipment (PPE)
- Medicare fraud
- Hoarding or price-gouging
- Unemployment benefit fraud
Hire Our Miami PPP Fraud Whistleblower Attorney
During these difficult times, it is hard to imagine that people would take advantage of relief funds designed to help those devastated by the coronavirus. Tragically, fraudulent schemes continue to be uncovered by regulatory agencies such as the DOJ and OIG. You have the right to report any suspicious activity from your employer or another entity without retaliation.
Depending on the circumstances, reporting PPP or stimulus fraud may entitle you to a portion of the government’s recovery. The U.S. Attorney’s Office has published dozens of cases related to COVID relief totaling millions of dollars in ill-gotten gains. Disaster-related fraud takes money directly from those who it is intended to help and can be stopped with your help. Our knowledgeable attorneys will help you report suspected fraud to the appropriate authorities and ensure your protection from retaliation.
When you contact our office, the consultation is 100% confidential. It is essential not to discuss the information with anyone except your attorney to protect your rights and your potential for recovery. The information you provide to our office will remain protected, helping to ensure that your lawsuit will go forward and not be dismissed.
Our lawyers are experienced in whistleblower / qui tam lawsuits and can help you receive the maximum compensation allowed under the law. Contact our office today to discuss your case at (305) 377-3770.