Back in the pandemic summer of 2020, we longtime criminal defense lawyers quietly wondered how long it would take for a wave of federal PPP loan fraud investigations to arrive. Now that tide is coming in. Federal agents from the Small Business Administration and the Secret Service are in Greater Charlotte knocking on doors of small and medium-sized business owners.
The laws and rules of the PPP Loan program under the CARES Act were hastily written (by necessity) and were changed midstream (also by necessity). Proof of loan fraud usually requires specific intent â€“ that the borrower knew he or she was breaking the law when the application was submitted, or when the funds were used for a particular (unapproved) purpose.
Good faith mistakes are not a crime.
We often hear people say, â€œBut if I get a lawyer wonâ€™t the police think that means Iâ€™m guilty?â€ I have a long speech why that mindset is just wrong. But letâ€™s try this: in what other situation would you freely talk to a stranger who knocked on your door and asked to come into your home and pummel you with questions about something you did two years ago, without letting you re-group and look at underlying documents?
Good businessmen and women wouldnâ€™t do that, but somehow a federal badge jars loose common sense. So remember this: the 5th Amendment is your right and your friend.
Plus, federal prosecutors seem to be charging people with making false statements to federal investigators more these days, in addition to or instead of the underlying crime that was being investigated. I wish more businessmen and women would politely but firmly decline to answer questions out of the blue.
But of course, if this happened, I might be out of a job, I guess.
All right, thanks for letting me vent. Back to workâ€¦