PPP Loan Fraud Investigated by These Federal Agencies
In March 2020, Congress approved a $2.2 trillion COVID-19 economic relief bill. CARES, or theCoronavirus Aid, Relief, and Economic Security Act, was enacted to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemicSocial Distancing Lawwhich resulted in many businesses closing their doors and laying off employees.
The government offered a$349 billion Paycheck Protection Program (PPP)aimed at helping businesses remain competitive throughout the Coronavirus pandemic by providing them with financial assistance. This program was designed to help self-employed workers, sole proprietors, nonprofit organizations, and tribal businesses continue to pay their employees.
The PPP loan amounts were determined by the average payroll cost and the number of employees. PPP loan recipients had to use 60% of their loan to cover payroll expenses. The remaining 40% could be used to cover rent, utilities, and mortgage interest.
Additionally, businesses that retained their workforce, maintained every employee’s salary, and covered their business expenses were eligible for paycheck protection loan forgiveness.
Some businesses and individuals took advantage of the government during this national disaster by obtaining an economic injury disaster loan fraudulently, using the funds for non-business purposes, and receiving loan forgiveness.
