FELDMAN FIRM OBTAINS RARE DECLINATION OF PROSECUTION IN PPP LOAN FRAUD INVESTIGATION TARGETING FIRM’S CLIENT
After more than 2 years, the government finally declined prosecution in a paycheck protection program (PPP) loan fraud investigation targeting the Firm’s client.
The client was a recipient of the very first round of Small Business Administration (SBA) loans under the PPP loan program. The Firm’s client was (and is) a far cry from many of the egregious (and frankly absurd) PPP loan cases we see every day involving multiple loans for non-existent businesses and get-rich-quick schemes pioneered by all too typical South Florida fraudsters.
Instead, and in stark contrast to the criminals who brazenly pilfered federal funds at the expense of taxpayers, the Firm’s client operated a successful logistics business transporting cargo throughout the country. The company’s success had even garnered attention in local papers in the Tampa area. The company had employees, payroll, and dozens of contracted drivers. Fast forward to the pandemic and March of 2020. The economic uncertainties of the pandemic caused the business, like many successful businesses, to wind down operations.
In October of 2021, the government then began investigating the business and its principals in connection with civil litigation wholly unrelated to PPP loans.
The investigation involved many of the usual suspects: interviews of witnesses, grand jury subpoenas to financial institutions for financial records, and grand jury subpoenas to the company. However, there was one wrinkle you do not see that often. The government called witnesses to testify before a grand jury at least twice. Usually when that occurs, the purpose of the testimony is to return an indictment, not to test the validity of the government’s theory or its evidence.
Recognizing the flaws in the investigation and the prosecutions theory, the Firm had a series of meetings with the government which were ultimately non-committal. The Firm then presented a white paper about the SBA PPP loan program, reinforced the good character and strong community ties of the client, and proposed alternatives to prosecution consistent with the directives in the Justice Manual.
In the end, justice prevailed. The government declined prosecution and the client’s life continues uninterrupted without the lingering threat of a federal indictment.
The Firm represents clients under investigation and accused of paycheck protection program PPP loan fraud. We would be more than happy to confer with you if you or your business has been the subject of a grand jury subpoena, civil investigative demand, or government inquiry involving a loan under the SBA paycheck protection program.
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