The US government has been charging people with bank fraud and other federal crimes related to abusing Paycheck Protection Program (PPP) loans. Some criminals have abused the PPP program and other COIVD-19-related aid, stealing millions of dollars in the process. And yes, some of the accused have been convicted and put in jail.
On this page, learn about what the government is doing to prosecute people who scam the PPP program, as well as the possible penalties and related latest PPP fraud charges.
PPP Loan Fraud Federal Investigations
As soon as the feds rolled out the PPP loan program in the middle of the COVID-19 pandemic in March 2020, law enforcement started to hear about PPP fraud. State and federal investigators started to investigate a steady stream of fraud allegations. Some of the investigates involve:
- PPP fraud in the loan application process
- Disbursement of funds to non-qualified individuals and companies, and
- Misuse of PPP proceeds, which were intended to pay for payroll and related business expenses
Some of those state and federal law enforcement investigations became arrests and prosecutions against hundreds of people and businesses. Even today, the government continues to find new PPP loan fraud suspects and cases every month. (Some of the most recent PPP loan fraud cases are at the bottom of this page.).
Also, as more Americans who got PPP loans since March 2020 apply for loan forgiveness, we can expect their original loan applications will trigger audits. This will lead to a closer examination of the payroll and financial information submitted at the time. Asking for PPP loan forgiveness after submitting false PPP applications is unwise and may lead to state or federal charges.
PPP Loan Fraud Sentences Usually Include Prison Time
How much time you get in prison in a federal case depends on the decision of the federal sentencing judge, who is guided by the US Sentencing Guidelines.
However, we can report that in most of the PPP loan fraud sentences doled out so far, most have included prison time. Only in a handful of cases have the defendants received only probation.
No matter if a PPP loan fraud case involves $20,000 or $20 million, you can receive a federal prison sentence. If there is convincing evidence of fraud and deception of the federal program, you can wind up behind bars for only $10,000 or $20,000.
It’s unsurprising that many convicted PPP loan fraudsters get prison time. After all, you can get long prison sentences for many types of federal fraud, such as mail fraud, wire fraud, bank fraud, and money laundering.
Federal Attorneys Pursuing All Levels Of PPP Fraud
While the multi-million dollar PPP loan scam cases get the national headlines, federal prosecutors are going after PPP loan fraud in all amounts. They have never said they won’t seek prison time for below a minimum dollar amount. We hear reports of arrests and arraignments for PPP loan cases involving only $10,000 or $15,000.
It’s hard to say how much resources the Department of Justice will dedicate to going after PPP fraud in smaller dollar amounts. However, prosecutors may be motivated to make an example out of small-time PPP fraudsters to send a message that they’re going after everybody.
We also know that most PPP loans were for less than $50,000, so it seems to follow there would be more fraud cases in those smaller loan amounts. It’s reasonable to assume ‘only’ stealing a small amount of PPP funds isn’t a wise strategy to stay out of federal prison.
If you are ever charged with PPP fraud, it’s important to seek qualified defense counsel as soon as possible. Whatever the dollar amount involved, it’s likely the federal government will dedicate some of its nearly-limitless resources to putting you behind bars.
Latest PPP Fraud News
Below are some of the most recent PPP loan fraud headlines:
- Former Mighty Morphin Power Ranger Charged With PPP Loan Fraud: Austin St. John, 47, is one of 20 people who were charged last week in a PPP fraud scheme involving 16 loans and $3.5 million.
- Pennsylvania Man Charged With $1.5 Million PPP Loan Fraud Scheme: Darryl Young, 59, has been charged with one count of conspiracy to commit bank fraud, two counts of money laundering, and four counts of bank fraud. The case involves about $1.7 million in PPP loans.
- Georgia Man Charged In $9 Million PPP Fraud Scheme: Carl D. Torjagbo was arrested this month on bank fraud and money laundering charges related to a $9.5 million PPP loan fraud scam. The case involved his claim that he needed a PPP loan for a business with 493 employees that does not exist.
- Alabama Man Indicted For Defrauding The PPP Program: Quincy Doss, 41, was indicted in Tuscaloosa last month for submitting two false PPP applications totaling at least $220,000. He allegedly misrepresented that his company had several employees when it did not.
- Mineral Wells, Texas Man Indicted For Conspiracy To Commit Wire Fraud: Michael L. Hill, 47, was accused of defrauding lenders and the PPP program of at least $3.5 million. He’s also accused of using the money and transferring it into his personal account to pay for personal expenses.
- Former Amtrack Employee Pleads Guilty To PPP Fraud: Stacey V. Santemore, 46, pleaded guilty in April to making false statements and theft of government funds. He admitted he illegally obtained $22,000 from the PPP program.