Federal Prosecutors Are Targeting Government Employees and Contractors for PPP and EIDL Loan Fraud

Many people took COVID relief loans during the pandemic without imagining that those applications would be reviewed years later. The U.S. Attorney’s Office in the Northern District of Georgia is now prosecuting government workers and employees of government contractors who obtained Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) funds. If you took one of these loans, you need to understand how these cases start and why you should talk to a federal criminal defense attorney before anyone contacts you.

The CARES Act, PPP, and EIDL Loans

The CARES Act created the PPP and expanded the EIDL program to keep small businesses and self-employed workers afloat. The PPP loans were issued through banks and backed by the Small Business Administration (SBA). EIDL loans came directly from the SBA. Both required applicants to certify key facts, including how many people they employed, what their payroll costs were, and what the loan money would be used for.

Why Government Workers and Contractor Employees Are Being Reviewed

Federal prosecutors can compare loan applications against other government records. When someone holds a full-time government or government contractor job and also applied for a loan based on a side business or self-employment, investigators may question whether the business was real and whether the numbers on the application were accurate. They may also look at whether the loan money was spent on personal expenses instead of business needs.

Not every loan that is questioned is a crime. Many people made honest mistakes on confusing applications or relied on a preparer who filled out the paperwork. The difference between a mistake and a federal crime often turns on what the applicant knew and intended, which is why these cases require a careful defense.

The Charges and the Time Limits

Federal prosecutors commonly bring charges such as wire fraud, bank fraud, false statements to a financial institution or to the SBA, theft of government property, and money laundering. These offenses carry serious prison exposure, along with restitution and forfeiture. Congress also extended the statute of limitations for PPP and EIDL fraud to ten years, so prosecutors can bring these cases long after the loans were issued.

For people who work for the government or a government contractor, the consequences can reach beyond a sentence. A federal investigation or conviction can affect a security clearance, a career, and a professional license.

What to Do If You Are Contacted

If agents contact you, you receive a target letter, or you learn that your loan is being reviewed, accept any paperwork politely and do not answer questions or try to explain. Call a federal criminal defense lawyer right away. An early conversation between your attorney and the U.S. Attorney’s Office can sometimes affect whether charges are filed and what they look like.

How We Can Help

At The Mendelsohn Ertel Law Group, our Atlanta federal criminal defense attorneys handle fraud investigations and prosecutions in the Northern, Middle, and Southern Districts of Georgia. We investigate the facts thoroughly, challenge the government’s evidence, and develop a tailored, aggressive defense strategy for each client.

Whether you have just learned about an investigation or are further along in the process, fill out our contact page or call us at 404-885-8878 for a confidential consultation.