COVID-19 Relief White Collar Crime Prosecution on the Rise

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By: James K. Paulick, Esq. 

Covid-19 relief white collar crime prosecution is on the rise and likely here to stay as we ride out the economic effects of the pandemic.

Desperation for businesses during the covid-19 pandemic, particularly restaurants and bars, has resulted in a flurry of indictments from the federal government for fraudulent requests for Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL) as part of the CARES Act.

According to the Department of Justice, as of the end of March 2021, over 474 defendants have been charged with fraud-related criminal offenses.  Approximately $500 million in attempted and/or successful schemes are being investigated through the criminal justice system in both state and federal jurisdictions.

These criminal investigations range from obvious fraud schemes down to individuals and businesses overstating their payroll costs, number of employees or their revenue. In other instances, the prosecutors are focusing on how the money was used after it was obtained, even if the acquisition of the funds was legitimate.

The lesson to be learned is the age-old adage that there is “no such thing as a free lunch.” When obtaining relief funds through government programs, extreme caution must be used in both the application process to obtain the funds and the eventual use of the funds to comply with the particular terms of the loan/grant/forgiveness obtained.

If you or your business is being investigated for CARES Act fraud, the U.S. Constitution not only grants you the right to counsel in all proceedings against you, it specifically grants you the right to remain silent to law enforcement.

Leech Tishman’s White Collar Defense Team stands ready to assist businesses who may be facing investigations related to COVID-19 relief measures.

If you have any questions about investigations regarding alleged CARES Act fraud, please contact James K. Paulick.

James K. Paulick is Counsel with Leech Tishman and a member of the Litigation & Alternative Dispute Resolution Practice Group, where he is involved with the White Collar Defense Team. He is also a member of Leech Tishman’s Corporate Practice Group, where he is a member of the firm’s Data Privacy & Cybersecurity Team. Jim is based in the Pittsburgh office and can be reached at 412.261.1600 or jpaulick@leechtishman.com.

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