Pandemic Fraud Convictions Mount Across United States

FEDERAL PANDEMIC RELIEF PROGRAMS

The COVID-19 pandemic led to an economic crisis that was felt strongly by most Americans. In an effort to help keep the economy afloat during the early stages of the pandemic, Congress authorized various forms of financial assistance that went directly to people and businesses across the country. In addition to stimulus payments that many Americans received, Congress authorized money for small businesses to help pay for expenses such as rent, payroll, and other overhead. The main source of financial assistance is found within the CARES Act (Coronavirus Aid, Relief, and Economic Security Act. 

Nearly $3 trillion dollars was set aside for individuals and small businesses in the form of forgivable loans through the Small Business Administration (SBA). The Paycheck Protection Program (PPP) within the CARES Act served to cover payroll expenses while other expenses could be covered through the Economic Injury Disaster Loan (EDIL) or the Unemployment Insurance (UI) programs. Unfortunately, many people saw these federal funds as an opportunity to defraud the government into giving out free money for nonexistent businesses and expenses. 

Many individuals have faced federal prosecution for defrauding the government through the submission of fake payroll statements, fake business documents, and other forms of dishonest behavior. If you are facing prosecution for allegedly defrauding a federal pandemic relief fund, then it is important to get in touch with an experienced federal criminal defense attorney immediately, as both the Department of Justice (DOJ) and federal judges are in favor of harsh sentences for individuals that are convicted.

EXAMPLES OF HARSH PRISON SENTENCES FOR PANDEMIC FRAUD CONVICTIONS

Federal prosecutors across the country are asking federal judges for harsh prison sentences for defrauding the CARES Act, and many federal judges are imposing them. Two examples of cases that resulted in harsh prison sentences include:

• A man from Texas was convicted of several forms of white-collar crime including wire fraud and money laundering for his actions defrauding the CARES Act through the submission of fraudulent PPP loan applications. He admitted to submitting applications to two different lenders for three non-existent businesses. In these applications, he made untrue statements about his employee and payroll expenses and even submitted false tax returns to obtain relief money. He allegedly received $1.6 million through his efforts, which led to a nine-year prison sentence by a federal judge.
• A California family of three was convicted of conspiracy to commit bank fraud, conspiracy to commit wire fraud, conspiracy to commit money laundering, several counts of wire fraud, and several counts of bank fraud for their actions in defrauding the PPP and EIDL program. Two of the family members were also convicted of aggravated identity theft. The family allegedly received more than $20 million for their efforts, which led to each member being sentenced to up to 17 years in federal prison by a federal judge.
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These are just two examples of many that involve harsh sentencing by federal judges for cases that involve defrauding the CARES Act. There are many other examples just like this with the increased focus and attention that the Department of Justice and Federal Bureau of Investigation (FBI) are putting into investigating and prosecuting these cases. It is expected that these cases will continue to be investigated and prosecuted for the foreseeable future.

FEDERAL FOCUS ON PANDEMIC FRAUD ENFORCEMENT

The FBI and federal prosecutors have directed many resources towards the investigation and prosecution of those who they suspect of defrauding and federal pandemic relief programs. It is important to understand that federal judges are not viewing these cases in the same lens as most typical federal fraud or other white-collar crime cases. Judges are taking an increasingly harsh stance against those who are accused of violating the trust of the U.S. government during the pandemic and defrauding a pandemic financial relief fund. Make sure you have the legal help you need so you don’t face unnecessary prosecution and punishment. If you are being investigated or have already been charged with an offense related to defrauding the CARES Act, then call us at Bajoka Law so we can help!