BSO Detectives Arrest Deputies Who Now Face Federal Charges for Misuse of PPP Loans
Posted on October 23, 2023 9:00 AM EST
The U.S. Attorney's Office for the Southern District of Florida announced that 17 employees from the Broward County Sheriff's Office were arrested and charged with federal crimes under the umbrella of Paycheck Protection Program (PPP) fraud.
Additionally, one current employee and one former employee self-surrendered at the federal courthouse in Fort Lauderdale. All are facing federal fraud charges related to the federal PPP loan program. The investigation was initiated by the BSO Office of Inspector General, and it began in November 2021, after the BSO Office of Inspector General received a tip alleging Paycheck Protection Program (PPP) fraud. To ensure a thorough and objective investigation, BSO sought out and partnered with the U.S. Attorney's Office, the Federal Reserve Board Office of Inspector General, and the Federal Bureau of Investigation.
The Paycheck Protection Program was established by the CARES Act and implemented by the Small Business Administration with support from the Department of the Treasury in 2020. The program provided small businesses with funds with the intent of keeping small businesses afloat during the Covid-19 pandemic. The Paycheck Protection Program allocated about $800 billion in loans through banks that were entirely guaranteed by the Small Business Administration and, in almost all instances, forgiven as long as the money was used for payroll and other legitimate overhead costs.
The federal government will charge an individual with PPP Loan Fraud if they can prove that a business or person submitted an application or certification for a loan under PPP based on false information. Additionally, a person can be charged if the business or individual did not follow the guidelines on how the money was spent. Fraud charges will stem from false statements on the application, applying to multiple lenders, using PPP loan money for unintended purposes, or submitting false certifications regarding PPP loan forgiveness.
The federal government will also conduct investigations if they come across "Red Flags" regarding certain PPP loans. Red flags would indicate whether an individual or business might have committed PPP fraud, and they include the following: A business recently opened just prior to applying for the loan, the business had a sudden spike in payroll numbers, and there were unverifiable employees on payroll sheets. Generally, if you are flagged for PPP fraud, you will be contacted by a federal agent from a law enforcement agency or other federal authorities regarding your loan under the CARES Act. Always remember, just because agents knock on your door, you do not need to speak with them. You may implicate yourself even more by providing a statement. If you are contacted by anyone asking about a PPP loan, politely refuse and contact a Miami fraud defense lawyer to protect your rights.
Like Medicare and mortgage fraud, South Florida has been a hotbed for PPP loan fraud. Individuals through their businesses have been charged with stealing millions from the government program by falsifying loan information about their companies, employees, revenue, income and taxes. Anyone charged by the federal government with PPP fraud will be facing significant incarceration under the federal sentencing guidelines. As with all fraud cases, the amount of time will depend on thee loss amount suffered by the PPP program. Anyone being investigated for or charged with the federal crime of PPP fraud, should contact and seek the advice of a Miami fraud defense lawyer with experience in these types of cases. You can call Donet, McMillan & Trontz to get more information from our criminal lawyers and avoid the worst consequences of a PPP fraud charge.