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Fun With Fraud: PPP Loans Have Some Living Large

    • Justice Department has filed a number of fraudulent PPP Loan purchases
    • What is the Government Accountability Office doing?
    • Liabilities that PPP loanees need to know

The PPP Loan has helped over 5 million business owners through the global pandemic and economic panic, providing the necessary relief to keep their companies afloat. Not without its flaws, however, the Loan has reaped 36 cases of fraudulent borrowing.

The entire list of cases so far is both extensive and amusing. Among the most fascinating borrowers of the Loan included a Florida man who obtained a $3.9 million loan and used $318K of it to purchase a Lamborghini Huracan sports car. Another case involved a Los Angeles man who raised $8.5 million through fake and altered documents; the money was spent on a trip to Las Vegas and stock market bets.

How did this happen? It’s likely a result of the speedy acceptance rate from the Small Business Administration (SBA) in an attempt to help the most businesses as possible, as fast as possible. But the SBA is not necessarily to blame; speed was essential in approving loans to provide the most immediate relief to the economy.

Treasury Secretary Mnuchin announced that every loan tendered under $2 million will be subject to review by the Department of the Treasury. As for the loan forgiveness process, he stated: “We’re going to have a very robust process to review loans before loans are forgiven.”

Business owners are encouraged to understand their liabilities in taking a PPP Loan to prevent false fraudulent accusations. Bloomberg Law has provided a helpful list to prevent issues with the False Claims Act.

To stay current on COVID-19 news and information, check out the DSJ COVID-19 Information Center or call our offices at (516) 541-6549 to speak to our Coronavirus Response Team!

Sincerely,

Devin McQuillan
Associate, Creative Solutions

Contact:
516-541-6549 | Email

 
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