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ARTICLE · 29 MARCH 2021

PPP Fraud: Q1 Update On DOJ Activity

Kelley Drye & Warren LLP
Kelley Drye & Warren LLP
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Kelley Drye & Warren LLP

Kelley Drye & Warren LLP

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Our previous alerts on CARES Act enforcement anticipated a wave of cases by the Department of Justice ("DOJ") charging COVID-related fraud for loans obtained through the Paycheck Protection Program ("PPP").

United StatesCriminal Law
Jaimie Nawaday
Jaimie Nawaday
Malavika (Molly) Rao
Malavika (Molly) Rao

Our previous alerts on CARES Act enforcement anticipated a wave of cases by the Department of Justice ("DOJ") charging COVID-related fraud for loans obtained through the Paycheck Protection Program ("PPP"). As expected, enforcement has been swift and steady. DOJ announced at the end of February 2021 that it has prosecuted more than 100 defendants in 70 criminal cases, and seized more than $60 million in cash proceeds derived from fraudulently obtained PPP funds, as well as numerous real estate properties and luxury items purchased with PPP funds.

The PPP provides forgivable loans to assist small businesses with expenses during the COVID-19 shutdown. Like many other federal programs, the PPP requires a series of certifications to receive federal funding. False certifications can expose small businesses to civil liability under the False Claims Act ("FCA") and the Financial Institutions Reform, Recovery and Enforcement Act ("FIRREA"), as well as criminal liability

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