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Federal Government to Take Swift Legal Action Against Stimulus Fraud

May 14, 2020

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In the first stimulus fraud case, two defendants were charged in the State of Rhode Island for allegedly applying for federal assistance above 500 million dollars. The two men are charged with conspiring to defraud the federal government by filing false applications for forgivable loans guaranteed by the Small Business Association (SBA) under the Coronavirus Aid, Relief and Economy Security (CARES) Act. The government is alleging they sought loans claiming to have dozens of employees at four separate business entities. An investigation uncovered the fact that they did not have any employees working at these businesses at the time the applications were filed.

While this is the first case of its kind, more will be on the way and rest assured, federal prosecutors and judges will have an unfavorable view of individuals charged with this type of fraud. Assistant Attorney General Brian Benczkowski summed it by stating, "Every dollar stolen for the Paycheck Protection Program (PPP) comes at the expense of employees and small business owners who are working hard to make it through these difficult times." The U.S. Attorney for the District of Rhode Island has directed all his prosecutors to make the investigations and prosecutions of stimulus fraud a top priority.

Man in Prison for Conspiring to Defraud the Federal Government
The federal government intends to make an example of these individuals to prevent others from committing the same offense. The FBI has indicated that they will aggressively go after people who are using the Covid-19 crisis as an opportunity to commit fraud. According to court documents, the case involves applications on behalf of three restaurants that supposedly employed dozens of workers. Two of the restaurants were closed before the Covid-19 pandemic and one was not even owned by the men. The fourth business was a wireless store. One of the co-defendants spoke with an undercover detective who was acting as a bank compliance officer. He claimed to have several employees, but in fact, the company never had any employees.

The potential sentences for defendants charged with this type of fraud will vary depending on the loss amount to the federal government. The Miami criminal lawyers at DMT have been representing clients charged with fraud offenses, including Medicare and mortgage fraud, both in state and federal court.

Anyone being investigated or already arrested for stimulus fraud stemming from the CARES Act should immediately seek the assistance of an experienced criminal attorney. Never make any statements to investigators because the information you provide to them can and will be used against you in court. Rest assured that more individuals will be investigated and arrested for similar offenses in the foreseeable future.

Our office was established with a vision to be among the finest law firms in South Florida. To meet this goal, our founding partners have assembled the finest Miami criminal lawyers to defend clients charged with criminal offenses. At DMT, we have over 50 years' combined experience and have successfully handled cases of all kinds. We spend countless hours protecting and defending our clients' rights in state and federal courts. Each attorney at our firm will leave no stone unturned to defend each case with the utmost skill and effort. When you need an attorney by your side, call DMT now at (305) 444-0030. Let us help you protect your rights and give you the legal representation your entitled to.
Categories: Federal Crimes
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