The Paycheck Protection Program has provided fertile ground for would-be embezzlers who want to get their hands on the millions of federal dollars that the program manages. A married couple from California was recently indicted in Honolulu on charges of money laundering, wire fraud and conspiracy with a scheme to defraud the United States government of funds intended for relief during our recent global crisis.
The indictment
According to the indictment, the couple submitted applications for PPP funds on behalf of a financial institution purported located in Hawaii and for two other businesses which they controlled. In every instance, the couple used interstate wires to file the applications and to receive and deposit the funds. The indictment alleges that the couple received $1,365,000 which they used to make several luxury purchases themselves, including sports utility vehicles and a home in Kapolei, Hawaii.
The couple was charged with taking advantage of the CARES Act, a federal law passed on March 29, 2020, that was designed to provide relief for Americans suffering during a time of economic turmoil. Among the sources of relief tapped by the CARES Act was $349 billion in forgivable loans to small businesses for job retention and other expenses. In April 2020, Congress authorized an additional $300 billion for similar PPP funding.
Further Investigations
As federal funds spread throughout the economy, the government agencies in charge of supervising the use of these funds have vowed to step up their investigation efforts. On May 17, 2021, Attorney General Merrick Garland established a task for to enhance efforts to combat fraud against these programs.
Conclusion
The defendants in this case are facing serious criminal charges; if convicted, they could be sentenced to sentenced to significant periods of incarceration and substantial monetary penalties. Anyone facing similar charges may benefit from consulting an experienced criminal defense attorney for an evaluation of the evidence, suggestion of potential defense strategies, and, if appropriate, assistance in negotiating an acceptable plea agreement.