What Are the Charges for PPP Loan Fraud in North Carolina?

By W. James Payne Law Firm

The COVID-19 pandemic triggered a wide range of economic responses, not least of all Paycheck Protection Program (PPP) loans. These loans were designed to help businesses pay their employees during the economic lockdown. However, with billions of dollars in relief funding came a rise in fraudulent claims, leaving some to wonder, “What are the charges for PPP loan fraud in North Carolina?”

Federal and State Charges for PPP Loan Fraud

For PPP loan fraud, the charges that individuals may face are determined by a combination of federal and state laws. However, because the loans were provided by the federal government, any fraudulent actions relating to them are typically prosecuted at the federal level.

This means anyone caught lying on their PPP loan application could be facing federal charges, which often carry severe penalties.

The most common charges for PPP loan fraud include:

1. Bank fraud: If an individual knowingly executes a scheme to defraud a financial institution, this is called bank fraud.
2. Wire fraud: If an individual submits a false PPP loan application electronically, this could be seen as wire fraud.
3. False statements: If a person lies/makes false statements to a federally insured bank or financial institution, it’s a federal offense.
4. Money laundering: If PPP loan funds were intentionally misused or funneled into illegal activities, money laundering charges could apply.

These cases can have long-lasting consequences, which is why understanding the full scope of the legal risks is important for anyone involved in a PPP loan fraud investigation.

How Serious Are the Penalties for PPP Loan Fraud?

The penalties for PPP loan fraud can be steep, especially considering the large amounts of money often involved in these cases. For every act of fraud, defendants can face years in prison, hefty fines, and restitution requirements.

The exact penalties depend on many different factors, like whether the fraud is part of a larger scheme or involves a large amount of money.

Statistics on Fraud and Corporate Crime in North Carolina

North Carolina’s justice system isn’t lenient on white-collar crimes. In 2020, the state saw a rise in fraud cases and identified nearly $40 million in potential PPP loan fraud.

While nationwide statistics on white-collar crime give a general understanding of the trend, North Carolina has specific concerns involving corporate fraud. In 2022, the U.S. Attorney’s Office in the Eastern District of North Carolina reported 30 PPP fraud indictments, with 30 more cases pending.

In addition, the U.S. Small Business Administration (SBA) Office of Inspector General conducted a review in 2023 that identified almost $200 billion in potentially fraudulent PPP loans nationwide.

Therefore, federal prosecutors have taken a hard stance by aggressively seeking severe penalties for those found guilty. In 2023, the Department of Justice announced that over 3000 individuals had been charged with COVID-19-related fraud to date, with a new wave of arrests adding 117 convictions.

Defenses Against PPP Loan Fraud Charges

Facing allegations of PPP loan fraud can be overwhelming, especially when the charges come with the weight of federal prosecution. However, being charged doesn’t automatically mean a conviction, and several legitimate legal defenses can be used to challenge these allegations.

Understanding your defense options is important, especially when your freedom, reputation, and livelihood are at stake. These defenses could include:

1. Lack of intent: If you made an honest mistake when filling out the application, it could be argued that you lacked intent.
2. Involuntary misrepresentation: It’s possible the information you provided was inaccurate because of either circumstances beyond your control or an error made by a third party.
3. Insufficient evidence: Prosecutors need to prove that you knowingly and intentionally committed fraud. If the evidence doesn’t meet this threshold, your charges could be reduced or dismissed.

If you’re facing charges, it’s important to work with legal counsel who understands how to navigate both the legal and financial complexities of these cases. At the W. James Payne Law Firm, our exceptional defense team can aggressively fight for your rights.

FAQs

Q: Can My Accountant Be Held Liable If They Helped Me File the PPP Loan Application?

A: Yes, your accountant could be held liable if they helped you file the PPP application. If your accountant knowingly gave false information or advised you to misrepresent facts on your PPP application, they could be investigated or even charged as a co-conspirator. However, if they were unaware of the inaccuracies or were misled themselves, liability becomes more complicated.

Q: If I Paid Back the PPP Loan, Can I Still Be Charged With Fraud?

A: Paying back the loan doesn’t erase past fraud. While paying it back can be a mitigating factor during sentencing, it doesn’t stop you from being prosecuted. If the government thinks you received the money illegally, they can still file charges. The core issue is whether you intended to deceive during the application or the forgiveness process.

Q: Are PPP Loan Fraud Investigations Still Happening, Even Years After the Loans Were Issued?

A: Yes, PPP loan fraud investigations are still happening, even years after the loans were issued. The federal government has allocated resources and funding to hunt down pandemic-related fraud for several more years. Investigations are ongoing, and new charges are filed regularly. If your application might cause issues, consult an attorney now before law enforcement contacts you.

Q: Could I Lose My Professional License If I’m Convicted of PPP Loan Fraud?

A: Yes, you could lose your professional license if you’re convicted of PPP loan fraud. Doctors, lawyers, real estate agents, and other licensed professionals risk disciplinary action or losing their licenses altogether. Regulatory boards often consider fraud a serious breach of ethics, especially when it involves public funds. Even an investigation can trigger a review of your professional standing.

Protect Your Future by Speaking With a Defense Attorney Today

If you’re under investigation or have been charged with PPP loan fraud in North Carolina, you need to act now. The W. James Payne Law Firm understands how high the stakes are, and we can defend your rights with precision and strategy.

Don’t wait for the case to build against you. Contact us today to arrange a confidential consultation.