Federal Crimes Blog

Paycheck Protection Program (PPP) Loan Fraud Cases

Posted by Hedding Law Firm | Jan 21, 2021

Are There Any Trends In The Federal Realm Between Everything That's Happened In 2020 With The PPP Loan Frauds? Is There Any Type Of Case That The Federal Government Is Going After More?

The federal government is definitely investigating any type of fraud that's related to the funds that were given out, such as SBA loans, PPP loans, and unemployment benefits given to individuals.

It is definitely on their radar to investigate people who are claiming unemployment when they're really not unemployed. When you compare the federal to state, the mechanisms that deal with criminal cases have really been affected the most.

In my opinion, they were not prepared for this pandemic at the federal level. A lot of judges have:

Paycheck Protection Program (PPP) Loan Fraud Cases
  • done everything they can to see people out of their courtrooms;
  • at the state level, they have to let people in the courts.

In Los Angeles, the court was only closed for one day since the pandemic started. Whereas, I haven't been able to go into a federal court in-person since the pandemic. They're either using video or WebEx on the phone to have people appear.

I even had a circumstance in which my client didn't agree to appear by phone or video. My client was ready to be sentenced. He didn't want to continue with the case anymore.

As a result, the judge continued the case on their own because we wouldn't agree to appear on video or WebEx.

I believe that many of the federal judges are concerned about getting the virus since they are older. They have a lot more autonomy and power. As such, they're deciding not to let people come into their courtroom.

Consequently, that has triggered a lot of issues. You are not able to do what you normally would in a federal case because of the inability to get access. Yet, at the same time, the prosecutors are still filing cases at the federal level. It's a real mess. I hope they are able to sort it out as we move into 2021.

Would You Advise Clients To Continue Their Cases Until The Federal Courts Reopen?

When it comes to federal criminal cases, at least in the central district, sometimes putting the pedal to the metal and trying to force your case through is a good strategy. Of course, that depends on the evidence against you and the posture of the government in your case.

Most of the time, it's a good strategy to cooperate with the courts and prosecutors when it comes to making sure that everybody's safe. Letting enough time pass so that people can get vaccinated can make it a much safer environment inside the federal courthouses and holding facilities.

As mentioned, you're supposed to meet with the government for various reasons in federal cases, and you are unable to do so right now, especially if you're in custody.

The only way you could communicate is through video, but most video feeds are being taken up by court appearances. It really makes it difficult to do anything in a federal case at this point. Therefore, it's probably better that most cases get continued until things get back to normal.

If you do have to appear in federal court for a proceeding that doesn't require a long meeting, there is a benefit of doing the appearance over video or WebEx.

It is much more convenient to appear via video or WebEx than having to trek all the way down to a federal court. In that sense, it's helpful.

However, if you want to effectively deal with the case and get the best result, you'll want to be there face-to-face with the judge and prosecutor.

Is the Government Aggressively Investigating Federal Fraud Cases?

When it comes to federal investigations relating to money that has been handed out, and somebody has committed some sort of fraudulent activity, they're definitely going to investigate and prosecute it.

That being said, they haven't fully put out the rules regarding the fraudulently used funds. If there's any discrepancy related to the rules, they're not going to deal with that type of case. They don't have the time or manpower to do it.

Federal Criminal Defense Lawyer for PPP Loan Fraud Cases

Also, a lot of money has been handed out under various circumstances, and in a hurry, which has put them at a disadvantage in trying to deal with fraud.

However, I do see them investigating and prosecuting cases. The FBI, secret service, and homeland security are investigating pretty clear-cut fraud cases.

Otherwise, they're not going to get involved. All of the red tape they have to go through has frustrated a lot of their investigations.

Have there been prosecutions related to the money that's been given up by the government?  Absolutely. Will the prosecutions continue? Absolutely. It's still probably a ways away.

The government isn't in a position yet to do anything to people who have done something illegal and fraudulent with federal funds that were given to them.

However, they will come back around once they get their bearings. Once the money is being collected, they'll realize who took it illegally.

Hedding Law Firm is a criminal defense law firm located in Los Angeles County at 16000 Ventura Blvd #1208 Encino, CA 91436.

Contact us for a free case evaluation at (213) 542-0994.

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