By Thomas K. Potter, III of Burr & Forman LLP
Published June 26, 2020
This week the US Department of Justice (“DOJ”) announced a trio of criminal prosecutions for fraudulent PPP loan applications. Each involved inter-agency investigations involving the IRS Criminal Investigation Division (“IRS-CI”) and the inspector generals of banking agencies or the SBA.
On Monday, June 22, DOJ announced wire-fraud charges against a Massachusetts man who fraudulently applied for over $13 million in PPP loans, ultimately receiving over $2 million. It’s here.
On Tuesday, June 23, DOJ unsealed an indictment charging a Texas man with wire fraud, false statements to a financial institution and money laundering for his alleged participation in a scheme to file fraudulent loan applications seeking more than $3 million in PPP loans. It’s here.
On Wednesday, June 24, DOJ unsealed a criminal complaint charging a Texas man with making false statements to a financial institution, wire fraud, bank fraud and engaging in unlawful monetary transactions in connection with fraudulent applications for more than $13 million in PPP loans. They arrested him that day. That press release is here.
These prosecutions are just preliminary returns on the government’s promise to vigorously prosecute fraud under the PPP loan program and CARES Act. They also exemplify the government’s focus on loan amounts over $2 million, which the government has said will be audited as a matter of course.
Thomas K. Potter, III is a partner in the Securities Litigation Practice Group at Burr & Forman, LLP. Tom is licensed in Tennessee, Texas, and Louisiana. He has over 34 years of experience representing financial institutions in litigation, regulatory, and compliance matters. He can be reached at firstname.lastname@example.org or 815.724.3231.