A New Round of PPP Funds Could Mean More Fraud

The federal government is working to make sure small businesses benefit from a new distribution of PPP funds and to prevent fraudsters from taking advantage of the program.

The latest rollout of Paycheck Protection Program (PPP) money has left many small businesses wondering if they will be able to receive a payout to alleviate some of their business expenses after failing to receive any money in the first round.

Government authorities have investigated several cases of PPP fraud after the first round of payments went out to some businesses that did not legally qualify for the loans. According to an analysis by the Wall Street Journal, “nearly 1,500 companies that received about $2 billion in PPP loans have faced allegations of violating government regulations or of criminal conduct.”

The U.S. Department of Justice (DOJ) has charged dozens of people for fraudulently obtaining PPP funds. Many of these individuals are charged with falsifying PPP loan applications and misusing the funds.

The DOJ recently announced the first-ever settlement in connection with PPP fraud. In that case, the government alleged that a small business fraudulently received $350,000 in PPP funds even though it was in bankruptcy and thus ineligible to receive assistance. In addition to paying back the PPP funds, the business agreed to pay $100,000 in penalties.

The next distribution of PPP funds will see a new level of oversight. Many people are calling for audits, integrity monitors, and whistleblowers to help make sure the PPP money is going into the right hands this time. This requested oversight would benefit small businesses and taxpayers.

Some small business owners felt slighted by the program and did not see its benefits. A recent analysis from WCNC Charlotte found that “as some small businesses waited for Paycheck Protection Program loans or were flat-out denied, newly released federal records reveal nearly a third of the money awarded in the Carolinas went to just 1% of the recipients, including several larger businesses that received the maximum $10 million.”

PPP loans were intended to keep small businesses afloat, but some individuals and businesses took advantage of the lack of oversight and committed fraud in order to obtain PPP funds. Whistleblowers with information about PPP fraud can file a case on behalf of the government and may be entitled to a portion of the money recovered as a reward. If you have information about CARES Act/PPP fraud, you should contact an experienced whistleblower attorney to learn more about your protections and rights.

Our Team

With more than 30 years of experience, the attorneys on Baron & Budd’s whistleblower representation team have represented dozens of clients in government fraud cases returning over $5.4 billion to federal and state agencies, with whistleblower recovery shares as high as 49%. They are ready to help if you have evidence of PPP fraud.

Please call (866) 401-5971 or complete our contact form if you would like more information. For more information, see What You Need to Know About Becoming a Whistleblower.  Please understand that contacting us does not mean that you have established an attorney-client relationship with Baron & Budd, P.C.

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