PPP loan fraud

PPP Loan Fraud Defense with Oberheiden P.C.

Featured photo by Karolina Grabowska from Pexels

Unfortunately, not all PPP loan recipients deserved to receive loan funds. They could face prosecution for PPP loan fraud.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act came into effect. Its primary aim was to provide financial relief to individuals and companies directly affected by the COVID-19 pandemic.

Among the features of the Act is the Paycheck Protection Program (PPP). This program provides small businesses with the financial resources they need to support ongoing operations. Unfortunately, not all loan recipients deserved to receive loan funds. They could face prosecution for PPP loan fraud.

The Paycheck Protection Program initially provided $349 billion in funding for forgivable loans to those businesses that qualify for it. Additionally, the program then added $310 billion in forgivable loans. Unfortunately, with such a massive amount of money involved, there’s also substantial risk of fraud. 


The Small Business Administration (SBA) and the US Department of the Treasury received thousands of applications from businesses every minute. With so many applicants, it was impossible for the program’s funding to be enough to grant everyone loans.

However, billions of dollars vanished within minutes. Consequently, it is quite predictable that federal authorities will investigate applicants for fraud risk if they were given loans through the program. 

PPP Loan Fraud Expected

The Paycheck Protection Program involved a considerable amount of money. Funds disappeared way too fast for federal authorities not to wonder how that happened.

Therefore, the Office of the Comptroller of the Currency, or OCC, has been contacted by the U.S Treasury Department’s Office on the authority’s opinion regarding the possibilities of fraud. Additionally, officials from the OCC will help identify potential flaws in the program. 

Similar financial relief programs also experienced fraud. The pace of the PPP rollout and the lack of review leaves more questions than answers.

However, the government has shared some clues about which type of businesses and loans it plans to focus on for potential fraud. All these factors make it possible for PPP fraud discussions to intensify. 

What Constitutes PPP Loan Fraud?

Many small business owners who received the forgivable loans under the PPP are panicking. They are uncertain whether or not their applications will be classified as a fraud. Mostly, this is because they understand they might not comply with the program’s final eligibility criteria.

This uncertainty comes about in part because the SBA updated the guidance for the PPP after loans were granted. Consequently, the SBA is notifying applicants that have been granted a loan that they can return their cash, with the program’s guidance, if they consider that they are no longer eligible. Additionally, they can do so without any consequence. On the other hand, failing to do so could result in prosecution for loan fraud.

What’s Next?

Do you think you need to prepare your defense in case of PPP loan fraud allegations? Then perhaps you need advice on what PPP loan application fraud might mean for your company. Either way, the criminal defense attorneys from Oberheiden P.C. can help. 

PPP loan fraud

Oberheiden P.S. has a national reputation, an impeccable track record, and extensive experience. Their criminal defense attorneys have a first-hand understanding of what happens in a federal case and the right solution for it.

Keep in mind that fraud under PPP will bring serious allegations that can lead to serious trouble. Therefore, it is important to trust the Oberheiden P.C. criminal defense attorneys to handle your case. In short, let the experts represent you if you are dealing with PPP loan fraud allegations.

About the Author

Lakshmi Prabha is a contributing writer, legal advisor, and advertising advisor.