PPP Loan Fraud

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Covid-19 And PPP Loans

In 2020, Covid-19 hit the United States. This virus put the country in pandemonium as an unprecedented number of people died. Millions of businesses suffered from employee shortages, deaths, and a nationwide lockdown. Medical experts urged people to self-isolate and quarantine for two weeks if they caught the coronavirus. This put many people out of work. This left companies understaffed. On the one hand, companies didn’t have enough employees to meet customer demands. On the other hand, fewer workers were available to deliver resources and products to stores to keep the stores running. These conditions forced many businesses to close.

The United States saw more than forty million Americans seek unemployment. The results devastated many Ohio businesses. The Small Business Administration created the Paycheck Protection Program in response, benefitting Ohio and other states. Better known as PPP loans, this program enabled many employers to remain operational despite the harsh realities of the Covid-19 pandemic.

Ohio PPP Loan Fraud Lawyer

If you have been arrested for a white collar crime such as PPP loan fraud, it is crucial to retain legal representation right away. Even at the early stages of your case, the actions you take or statements you make can have a serious impact on the outcome. During a case like this, contact Joslyn Law Firm. Our attorneys are experienced in criminal defense and will be by your side every step of the way.

Allow us will provide clear advice and guidance. Call (937) 356-3969 to schedule a free consultation today. Joslyn Law Firm helps businesses facing charges in Dayton and surrounding areas such as Xenia, Kettering, New Carlisle, and Springfield.

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Information Center

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Paycheck Protection Program Definition

The government-backed Coronavirus Aid, Relief, and Economic Securities Act (a.k.a., CARES Act) became effective on March 27, 2020. The Small Business Administration—SBA—oversaw the act, providing loans to small business owners who needed assistance paying employees, rent, and utilities. The government also intended for PPP loans to assist employers in paying their employees. Thus, the company’s number of employees and the employees’ wages impacted how big of a loan the company could receive. The more employees and revenue a business supposedly had, the bigger the loan. Unfortunately, some people took advantage of this loan.

Investigators soon learned that people who did not qualify for a forgivable PPP loan falsified documents and receipts to receive government aid. Rather than use this aid to keep their businesses operating, fraudulent receivers used it to purchase luxury items, such as designer cars, jewelry, and expensive homes. With the government extending over four trillion dollars in funding, it wasn’t enough as legitimate businesses and applicants received smaller amounts than many illegitimate applicants. As the deceit negatively impacted American and Ohio businesses, law enforcement punished those defrauding the system.

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How PPP Loans Work

The Paycheck Protection Program offered first-time and second-round draw picks. The government intended these loans to cover the expenses of keeping employees on the payroll, repairing damage from vandalism and looting, and other Covid-19-related business expenses. The SBA agreed to forgive these loans if companies met all the employee-retention criteria.

PPP loans have a 1% interest rate. If the SBA issued the loan before June 5, 2020, it has a maturity rate of two years. The maturity rate would extend to five years if the SBA issued the loan after June 5, 2020. Initially, borrowers benefitted from deferred loan payments if they applied for loan forgiveness until the SBA remits the borrower’s loan forgiveness amount to the lender. If a borrower didn’t apply for loan forgiveness, the SBA deferred payments for ten months after the end of the covered period for the borrower’s loan forgiveness, which was eight to twenty-four weeks.

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Applying for PPP Loans

The following companies impacted by the coronavirus could have applied.

  • Sole proprietorships
  • Independent contractors
  • Self-employed workers
  • Any business, non-profit, tribal business, or veteran agency with more than five hundred workers
  • Any business with a NAICS code that begins with 72 that has more than one physical location and employs less than 500 workers per location

The SBA stopped accepting PPP loan applications on May 31, 2021. During the application period, no collateral, sureties, or personal guarantees were necessary. Nor were there small business fees attached to these loans and applications. Before the closing period, all first-time applicants had the same PPP loan forgiveness terms regardless of their credit lender. They had to fill out the PPP First Draw Borrower Application Form or the First Draw Borrower Application form for Schedule C Filers Using Gross Income. Second-time borrowers had to have been previously eligible for the first draw, having used all their loan money, have no more than three hundred employees, and fill out the PPP Second Draw Borrower Application Form.

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PPP Loan Fraud Crimes

Dayton, Ohio police may charge Ohio residents with loan fraud under wire fraud, bank fraud, or aggravated identity theft laws.

Wire Fraud

According to 18 U.S. Code Statute 1343, a person commits wire fraud when using pretenses, representations, or promises to further a get-money scheme. Typically, this offense is punishable by twenty years in prison. However, the offense becomes punishable by thirty years if the person committed this fraud during a state of emergency—in that case, the courts may issue a fine to the defendant up to one million dollars.

Bank Fraud

Under 18 U.S. Code Statute 1344, a person commits bank fraud when knowingly or attempting to defraud a financial institution or third-party using pretenses, representations, or promises. This federal offense is punishable by up to thirty years in prison and a fine of up to one million dollars.

Aggravated Identity Theft

18 U.S. Code Statute 1028A criminalizes knowingly using another person’s identity to embezzle funds. This felony offense has a mandatory minimum of a two-year prison sentence.

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Additional Resources

First Draw PPP loan – This government website provides information regarding the Covid-19-related Paycheck Protection Program for first-round applicants.

Second Draw PPP loan – This government website provides information regarding the Covid-19-related Paycheck Protection Program for second-round applicants.

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Ohio PPP Loan Fraud Attorney | Joslyn Law Firm

If your business is under investigation for PPP loan fraud, you do not have to face this alone. You have the right to have an attorney stand by you. At Joslyn Law Firm, our legal defense team has helped hundreds of businesses fight their PPP loan fraud charges. We can do the same for you.

Our lawyers are prepared to deliver the zealous advocacy you need. Call (937) 356-3969 to schedule a free consultation today with Joslyn Law Firm. We represent clients in Dayton, Ohio including nearby areas such as Montgomery County, Miami County, Clark County, or Greene County.

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  • Brian Joslyn was named Best Lawyer in 2019 by Birdeye.
  • Columbus CEO magazine has yearly selections for the best attorneys in Columbus Ohio. Brian Joslyn has been identified as one of the most highly skilled attorneys across central Ohio.
  • Brian Joslyn has earned recognition for community leadership by Lawyer LegionLawyer Legion
  • Preeminent Attorney Award. Peer rated for highest level of professional exellence.
  • The Better Business Bureau (BBB), founded in 1912, is a private, nonprofit organization whose self-described mission is to focus on advancing marketplace trust.

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