Can I be Charged with EIDL Loan Fraud?

Congress passed the CARES Act on March 29, 2020 which created billions of dollars to provide Economic Injury Disaster Loans (EIDL) to individuals who owned businesses negatively impacted by the COVID-19 Pandemic. The EIDL loan provided most businesses up to $150,000 in loans that were supposed to help provide “working capital” to businesses. The loan also provided extremely favorable repayment options including 3.75% interest, 12 month deferral period, and a 30 year repayment plan.

While most business have used the EIDL loan as a lifeline during the COVID Pandemic, there have been individuals that have taken advantage of the federal government’s financial goodwill. In August of this year, the federal government indicted two individuals who allegedly submitted false documentation that they owned a farm with numerous employees. The government’s complaint alleges that the defendant’s farm did not exist and they had no employees.

It is very possible that the federal government has barely scratched the surface of this type of improper conduct and there will be more cases similar to this one that will be prosecuted in the near future.

How Can I be Charged with EIDL Loan Fraud?

EIDL Loan Fraud generally involves an individual who lies about his or her income or submits false documentation of his or her income for the purposes of obtaining a higher EIDL loan. The EIDL application is generally done online. Because businesses needed funding so quickly during the COVID pandemic, the government had very lax rules regarding proving income on EIDL applications. In fact, unlike PPP loan applications, EIDL applications did not require an individual to provide any supporting documentation of their 2019 income on their initial application! Applicants could simply write in any amount that they wanted for their earned income.

The lack of required documents and government review resulted in a very easy fraudulent scheme for some applicants who simply fraudulently stated they earned a higher income to receive a bigger loan payment.

If an individual misrepresents their income on an EIDL loan application, they could be subjected to numerous federal criminal charges including 1) Bank Fraud for misrepresenting facts on the application to the bank, 2) Wire Fraud if the money was sent to their bank account via wire transfer, 3) Mail Fraud if documents or applications were sent via the U.S. Postal Service, or 4) Identity Theft if another person's identity was used in applying for the EIDL loan application.

Penalties for EIDL Loan Fraud

Each of the criminal charges above carries serious potential consequences.

1. Bank Fraud – Punishable by up to 30 years in a federal prison and a $1,000,000 fine.

2. Wire Fraud –Punishable by up to 30 years in a federal prison and a $1,000,000 fine.

3. Mail Fraud – Punishable by up to 30 years in a federal prison and a $1,000,000 fine.

4. Identity Theft – Punishable by up to 30 years in a federal prison and a $1,000,000 fine. The crime can also be punishable by a minimum mandatory sentence of 2 years which will run consecutively to any other conviction.

In addition to the penalties above, arrests or convictions for any of these criminal charges could result in the individual to being placed in removal proceedings if they are not a United States citizen.

Defenses to EIDL Loan Fraud

An arrest to a crime does not always result in a conviction. If you, or someone you know, is arrested for any of the crimes related to PPP loan fraud, they may have several defenses available to them.

The federal government has the burden to generally prove that the defendant knowingly misrepresented facts on his or her EIDL loan application. Therefore, a defendant could conceivably argue in an EIDL fraud case that any inflated amount of income on his or her application could have been due to mistake or neglect.

Attorney for EIDL Loan Fraud in Miami, FL

If you are being investigated for any crime related to EIDL Loan Fraud in Miami, FL, you will need an attorney with vast criminal defense experience. The crimes associated with EIDL loan fraud have serious consequences and your freedom could be at stake.

E.J. Hubbs is a former prosecutor with over 10,000 criminal cases in his career. In addition, he is Board Certified in Criminal Trial Law by the Florida Bar. This is an honor held by less than 1% of attorneys in Florida.

Hubbs Law represents clients on all types of criminal cases, including crimes related to EIDL Loan Fraud, in Miami, South Miami, Hialeah, Cutler Bay, North Miami, Kendall, Palmetto Bay, Pinecrest, Homestead, and anywhere else in Miami-Dade County.

Hubbs Law offers free consultations for all criminal cases. Call anytime to discuss a case or legal issue at 305-570-4802.

Disclaimer:

Please note that by reading this blog you are not entering into an attorney-client relationship with Hubbs Law, P.A. This blog only provides general legal information. Every case is unique and you should request a consultation to ensure that you are getting the correct legal advice for your specific case.