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What to Know About CARES Act Fraud and Your Defense

CARES act

There are many different types of white collar fraud crimes under federal law that can result in criminal charges. While some types of federal fraud crimes have been around for decades or longer, other types of fraud charges are new and connected to the COVID-19 pandemic. While COVID-19 testing fraud investigations and related health care fraud or mail and wire fraud charges have been on the rise as a result, the pandemic has also led to federal investigations and criminal charges related to CARES Act fraud. Early on in the pandemic in 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, along with the Coronavirus Response and Consolidated Appropriations Act to provide economic relief and funding to individuals and businesses.

In late 2021 and the early days of 2022, the U.S. Department of Justice announced a number of CARES Act fraud convictions and sentences related to the Paycheck Protection Program (PPP), which provided loans that were guaranteed by the Small Business Administration (SBA) through the CARES Act. As investigations and prosecutions for CARES Act fraud continue, what do you need to know?

CARES Act Fraud Cases and the COVID-19 Fraud Enforcement Task Force

Beginning in May 2021, the U.S. Attorney General created the COVID-19 Fraud Enforcement Task Force, which was established in order to “enhance efforts to combat and prevent pandemic-related fraud,” according to a press release from the U.S. Department of Justice (DOJ).

The DOJ explains that the Task Force’s responsibilities include “efforts to investigate and prosecute the most culpable domestic and international criminal actors,” and to assist “agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts.” Since the CARES Act took effect and PPP loans were distributed, the Fraud Section of the DOJ has prosecuted more than 150 individuals or entities, and it continues to investigate and prosecute CARES Act fraud.

Allegations of CARES Act fraud related to PPP loans include but are not limited to the following acts:

· Fraudulently inflating payroll numbers to obtain larger loans;

· Applying for multiple loans with different lenders;

· Lying about payroll expenses;

· Providing fraudulent documentation with PPP loan applications, such as fabricated payroll information or tax records; and

· Buying shell companies to apply for additional PPP loans.

What You Should Do If You Are Under Investigation or Facing Charges

Fraud allegations concerning the CARES Act and PPP loans are serious, and you need to have a federal fraud crimes defense attorney on your side. It is important to remember that federal fraud crimes require the prosecution to prove intent to defraud. As such, our firm may be able to establish that any discrepancies in your PPP loan application were mistakes as opposed to evidence of an intent to defraud. Other defenses may also be applicable to your case.

Contact a Fraud Defense Attorney in Dallas

If you are facing CARES Act fraud charges or being investigated, or if you have questions or concerns about any other type of federal fraud crime charges, our Dallas federal criminal defense attorneys can assist you. Contact the Law Office of Patrick J. McLain, PLLC today.

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