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Twenty-Two Charged With PPP Fraud Scheme

Fraud6

Twenty-two defendants have been charged with attempting to defraud the Payroll Protection Program created by the federal government during the COVID quarantine. The funds were earmarked for business owners who were currently shut down because of the quarantine to help continue to pay their employees while they were closed for business. Fraud related to the program was extensive, as is the case with all government programs, but the federal government has been doing mop-up duty on those who have been caught.

According to the charges, 22 people were involved in submitting false claims on behalf of 14 businesses seeking $800,000 each to protect their payroll. To be awarded the PPP money, businesses had to certify that they were open as of February 2020, had employees, paid payroll taxes, or paid independent contractors. They also had to ensure the funds were used to pay furloughed workers.

Elements of fraud 

The crime of fraud is committed when the government can prove you knowingly deceive someone with materially false statements for financial gain. The government must, therefore, prove your intent.

In this case, the government has documentation submitted by the defendants attesting to the fact that the business they were representing had 60 employees with around $300,000 in payroll. To justify these sums, the business had to file out an IRS Form 941 which is what employers use to report payroll taxes. Federal authorities are claiming that the individuals who submitted the claims lied on the IRS form to actuate the fraud.

The federal government claims that the funds acquired through the fraudulent PPP applications were then dispersed to conspirators in a manner that hid its true purpose. The conspirators used the money to purchase luxury vehicles and other assorted items.

Already, six defendants have pleaded guilty to fraud charges, lowering the chances that the remaining defendants will be able to establish a strong defense. However, the purported “mastermind” of the fraud is among those to plead guilty.

Thus far only one of the defendants has been sentenced after pleading guilty to conspiracy to commit bank fraud and wire fraud. He was given a sentence of three years and five months plus 5 years of supervised release. He was ordered to pay nearly $1 million in damages while the IRS oversaw the forfeiture of $150,000 in assets.

The purported mastermind of the fraud also pleaded guilty to bank and wire fraud charges along with a money laundering charge. As part of his plea agreement, he described how the fraud was conducted and admitted to stealing over $14 million from the federal government. His sentencing is scheduled for September.

Talk to a West Palm Beach Criminal Attorney Today 

If you are facing charges related to fraud, money laundering, or conspiracy, call the West Palm Beach criminal attorneys at The Skier Law Firm, P.A. immediately. We can help resolve the allegations in a manner that does the least amount of damage to your future.

Resource:

justice.gov/opa/pr/twenty-two-charged-connection-more-11-million-paycheck-protection-program-fraud-scheme

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