Rather, the Act simply states that PPP loan recipients who fail to satisfy the employee retention and qualified expenses criteria for loan forgiveness must repay the loans at an interest rate of 1%. The CARES Act does not contain provisions for criminal enforcement of the Paycheck Protection Program.
A key component of the Paycheck Protection Program is the provision that the loans could be forgiven entirely provided that recipients retain their workforce, maintain employees’ salary levels, and use the funds to cover payroll costs and eligible expenses. In the midst of the coronavirus pandemic, the PPP was intended to provide business owners feeling the economic effects of COVID-19 with a direct incentive to keep their employees on the payroll, by providing access to the capital necessary to pay employees’ salaries and support ongoing business operations. The Paycheck Protection Program (PPP) is a $670 billion federal loan program that was established by the SBA in March 2020, under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
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Contact our PPP fraud attorneys at Federal Criminal Defense Pro today for a free initial consultation. The penalties associated with PPP loan fraud are severe, so don’t hesitate to seek legal guidance. If you are a small business owner and you applied for or obtained a loan through the Paycheck Protection Program, you could be at risk for an SBA audit or a federal investigation, which could lead to criminal charges. Small Business Administration (SBA) has announced that borrowers who received $2 million or more in PPP funds will automatically be subject to an audit, as will some borrowers who received smaller loans, as part of an ongoing effort to identify any potential abuses of the federal loan program. Widespread scrutiny of the Paycheck Protection Program has prompted a flood of PPP loan fraud investigations by the Department of Justice, in coordination with a number of other federal investigative agencies, such as the IRS and FBI.