Federal Government Continues Crackdown On COVID-19 Fraud

The federal government has been cracking down on people suspected of committing fraud related to the ongoing COVID-19 pandemic. Specifically, federal prosecutors are targeting individuals and businesses that allegedly obtained federal relief funds using fraudulent tactics. Many of these cases center on the Paycheck Protection Program (PPP), a program created by Congress to provide financial relief to small businesses during the pandemic.

In 2021, businesses with no more than 500 employees were permitted to apply for PPP loans, which were issued by private lenders but 100-percent backed by the U.S. Small Business Administration. These loans were meant to help the borrower meet ongoing payroll and other business-related expenses during the pandemic. The loans themselves were forgivable by the SBA provided certain conditions were met.

Florida Man Sentenced to 2 Years in Jail for Lying to Obtain PPP Loan

Recently, a federal judge sentenced a Port St. Lucie, Florida, man to two years in prison after pleading guilty to fraud charges in connection with a PPP loan. According to the U.S. Attorney’s office in Miami, the defendant was the chief executive officer of a Florida company known as MWB. The defendant applied for a PPP loan with a lender. The defendant sought a loan of $414,675 after representing MWB had 21 employees and an average monthly payroll of $165,870. The lender approved the PPP loan and wired the money to the defendant’s business account.

In fact, prosecutors said, MWB “had no employees and no monthly employee payroll.” Instead, the defendant “gave a large portion of the fraudulent loan proceeds he received to co-conspirators who helped obtain the loan, including one such payment of over $100,000 that was disguised in bank records as ‘stud fees.’”

Because the defendant filed his PPP loan application online and received the funds via a bank transfer, the government charged him with federal wire fraud. The defendant ultimately agreed to plead guilty to a related count of conspiracy to commit wire fraud. The maximum possible sentence for this crime is five years in federal prison.

However, the judge sentenced the defendant to 24 months–two years–at a hearing held on February 1, 2022. The sentence also requires the defendant to pay approximately $415,000 in restitution to the lender.

Taking White Collar Crimes Seriously

Cases like this illustrate just how seriously the government takes allegations of COVID fraud. Some people think that these types of “white collar” crimes are treated less severely than violent crimes. But the reality is quite different. If anything, you can expect the full weight of the government to come down on you when there are allegations you have defrauded the government itself in any way.

That is why it is important to seek out legal advice and representation from an experienced Orlando white collar crimes defense lawyer even if you are simply under investigation for possible fraud charges. Never assume a case will simply go away. If you need immediate assistance, contact the Baez Law Firm today to schedule an initial consultation.

Source:

justice.gov/usao-sdfl/pr/south-florida-covid-19-relief-fraudster-sentenced-federal-prison