Two Florida men have pleaded guilty to defrauding the PPP and small business loan program during the pandemic. While theft of government resources may seem like a victimless crime, the federal government gets very angry with those who attempt to defraud funds earmarked for disaster relief. The PPP program was authorized under the CARES Act to ensure that small businesses had the resources to keep their payrolls intact even as their industry was shutting down.
The scheme involved spoofing fake businesses, misrepresenting the number of employees, and submitting forged or stolen documents. Because the fraud was committed against a disaster relief program, there are substantial aggravating penalties associated with the crime. In this case, the two men both pleaded guilty to conspiracy to commit wire fraud, which has a maximum 20-year sentence. However, they could have been charged individually for each fraud they committed and held accountable in accord with the amount of money they stole, which is $35 million.
Others were also charged in the scheme, but sentenced for lesser roles. It seems unlikely that given the soft conviction the defendants will be able to avoid a sentence that isn’t very close to 20 years.
Understanding PPP fraud
The federal government doesn’t care if you defraud their PPP loan program because they’ll catch up with you later, review all documents submitted, and then attempt to either recover the money or put you behind bars if you cannot pay it back. Anything you purchased with the stolen money will be liquidated to repay the government at auction. However, in the short term, it looks like you’re getting away with something. In this case, the theft of public funds was so easy that the conspirators attempted to milk that cow over and over again until they’d run up a $35 million tab. They also helped others secure money from the program using the same tactics. But on a long enough timescale, all of these applications were reviewed, flagged, and then investigated by the IRS’s criminal division. While these folks were living large, the IRS was breathing down their neck, ready to pounce when they had uncovered the full scope of the fraud.
By and large, these are the types of things that you see from folks who think that they can get away with defrauding government programs. They get away for it a little bit while the IRS extends more and more rope for you to hang yourself with, and then, when the IRS is sure that they’ve gotten everyone involved in the conspiracy, they come down on you like a ton of bricks, liquidated everything you purchased, and hang a double-digit sentence on you.
Talk to a West Palm Beach Fraud Lawyer Today
While the penalties for fraud can be steep, a criminal defense attorney can help mitigate the damage the federal government can do and protect you from speculative claims and shoddy investigative work. Call the West Palm Beach criminal attorneys at Skier Law Firm, P.A. today to schedule an appointment and learn more about how we can help.
Resource:
justice.gov/opa/pr/two-florida-men-plead-guilty-35-million-covid-19-relief-fraud-scheme