The outbreak of COVID-19 in March of 2020 placed many small businesses under significant financial pressures. As a way to alleviate this pressure, the federal government passed a collection of laws that allowed these companies to obtain low-interest loans to remain in operation.
Programs such as Paycheck Protection Program (PPP), the CARES Act, and the SBA all offered cash to companies to continue paying employees and keep the doors open. Unfortunately, a combination of unscrupulous business owners and a lack of government oversight lead to a significant level of fraud.
The United States Justice Department relies on whistleblowers to come forward to report these abuses. A Charleston PPP loan fraud lawyer could help people to serve as whistleblowers and even to demand a reward under a writ of Qui Tam.
The federal government enacted a variety of economic relief programs with the aim of helping struggling businesses during COVID-19. However, not every company qualified for these programs. Depending upon the exact program, businesses must demonstrate either their size or their need for the funds.
The most prominent example is the Paycheck Protection Program (PPP). This program offers loans to companies for the express purpose of keeping employees on the payroll. Examples of fraud can include using the funds for other purposes or a company not having employees.
Another example is the COVID-19 Economic Injury Disaster Loans (EIDL). Here, the government offers loans that a company may use for any purpose. However, only small businesses can receive these payments. The government considers a business to be small if they have fewer than 500 employees. A Charleston PPP loan fraud attorney could help potential whistleblowers thoroughly investigate whether a company should have qualified to receive a COVID-19 relief loan.
Various federal laws prohibit the commission of fraud when demanding money from the government. Receiving PPP loan funds as the result of mischaracterizing one’s business is certainly an example of illegal behavior. Specifically, the False Claims Act under 31 United States Code § 3729 says that no party may knowingly submit a false claim to the government for payment. PPP loans fall under this category.
In many situations, the Department of Justice and other regulatory agencies rely on whistleblowers to report instances of fraud. These agencies simply do not possess the resources necessary to uncover these illegal activities on their own. Serving as a whistleblower who has new information about PPP loan frauds is a patriotic thing to do.
Additionally, the government may also pay out monetary rewards to whistleblowers. According to 31 United States Code § 3730(c)(5), a successful prosecution that results from a whistleblower complaint entitles that whistleblower to a monetary reward. This reward will range in value from 15 to 25 percent of the recovered funds in the case. A Charleston PPP loan fraud attorney could help individuals to submit writs of Qui Tam for rewards.
The federal government COVID-19 loan programs exist to help companies struggling economically during the pandemic. However, while many companies have a legitimate need for this aid, others have abused the program. This not only results in waste with money not going where it needs to but is also illegal.
Companies that commit PPP loan fraud violate federal law. Citizens who witness this activity have the option to come forward as whistleblowers. If this information results in a conviction, the government may issue a monetary reward. A Charleston PPP loan fraud lawyer is ready to help you to gather information about the fraud and submit comprehensive reports to the relevant government agencies. Call today to learn how you can come forward as a whistleblower.