If you’re aware of any potential fraud related to the Paycheck Protection Program (PPP), it’s important to report it as soon as possible. Here’s how to do so.
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What is PPP loan fraud?
Types of PPP loan fraud
There are several types of PPP loan fraud, but they all involve someone submitting false or misleading information in order to receive a loan they would not otherwise be eligible for. Some common types of PPP loan fraud include:
-Falsifying information on the loan application, such as exaggerating the number of employees or the amount of payroll expenses
-Using the loan funds for ineligible expenses, such as personal expenses or luxury items
-Failing to disclose other sources of funding that would make the applicant ineligible for a PPP loan
-Creating false documents to support the loan application, such as falsified payroll records
-Committing identity theft by using another person’s information to apply for a PPP loan
Who is committing PPP loan fraud?
PPP loan fraud is becoming more and more common as the Paycheck Protection Program continues to be the most popular relief program during the pandemic. Fraudsters are taking advantage of the program and its lack of regulations to commit loan fraud. But who exactly is committing these crimes?
There have been reports of individuals committing PPP loan fraud. Some examples of fraud perpetrated by individuals include:
-Individuals using a false SSN to apply for a PPP loan
-Individuals using someone else’s information to apply for a PPP loan
-Individuals submitting false or inflated personal financial documents in order to receive a larger PPP loan
If you have information about an individual who has committed PPP loan fraud, you can report it by contacting the FBI.
phony businesses, using straw companies, claiming they have hundreds of employees when they don’t, and more
How to report PPP loan fraud
The Paycheck Protection Program (PPP) is a loan designed to help small businesses keep their workers employed during the COVID-19 pandemic. The loan is forgiven if the business spends the money on payroll and other approved expenses. Unfortunately, there have been reports of fraud related to the PPP. If you think you have witnessed or been a victim of PPP loan fraud, you can report it to the proper authorities. Here’s how.
Federal Trade Commission
If you think you’ve been a victim of PPP loan fraud, report it to the Federal Trade Commission at ftc.gov/complaint.
If you’ve been contacted by someone claiming to be from the SBA or another government agency offering to guarantee your loan for a fee, report it to the FTC and SBA Office of Inspector General.
You should also contact your state attorney general’s office and file a complaint with the Better Business Bureau.
Small Business Administration
The U.S. Small Business Administration (SBA) is committed to helping American small businesses start, grow, and succeed. SBA does not make direct loans to small business owners. However, SBA does have a loan fraud reporting line for individuals who believe they may have been the victim of PPP loan fraud or other type of SBA loan fraud.
To report potential PPP loan fraud or other type of SBA loan fraud, please call the SBA Office of Inspector General Hotline at 1-800-767-0385 or visit www.sba.gov/oom/fraud to file a complaint electronically.
How to report PPP loan frauds
The U.S. Small Business Administration (SBA), in consultation with the Department of the Treasury, has released a Loan Forgiveness Application for Paycheck Protection Program (PPP) Borrowers and Lenders. This form is for borrowers to apply for forgiveness of their PPP loans, and instructs lenders on how to confirm accuracy of the borrower’s certification.
If you believe that someone has submitted false information on their PPP loan application or if you think there may be fraud associated with a PPP loan, please submit a report to the FBI at tips.fbi.gov.
What happens after you report PPP loan fraud?
The investigation process
If you believe that you have been the victim of a PPP loan fraud, you should contact the FBI immediately. You can file a complaint with the FBI’s Internet Crime Complaint Center (IC3) at www.ic3.gov.
The IC3 will review your complaint and, if appropriate, forward it to the FBI field office that has jurisdiction over the location of the alleged fraud. The field office will then investigate the allegations.
During the course of an investigation, agents may contact you to request additional information about the alleged fraud. They may also contact the person or business accused of perpetrating the fraud.
The investigative process can be lengthy, and it is not always possible to provide updates on the status of an investigation. However, if agents determine that a crime has been committed, they will work with prosecutors to bring charges against those responsible.
Potential outcomes of an investigation
The potential outcomes of an investigation depend on many factors, including the severity of the allegations, the evidence collected, and the law enforcement resources available.
If the evidence indicates that a crime has been committed, law enforcement may pursue criminal charges against the individual or individuals responsible. This could result in a prison sentence and/or a fine if the person is convicted.
If the evidence does not support criminal charges but indicates that laws or regulations were violated, the case may be referred for civil or administrative action. This could result in penalties such as a fine or suspension of privileges (such as a license to operate a business).
In some cases, an investigation may find that no laws were violated and no further action will be taken.