Law.com Subscribers SAVE 30%
Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.
Prosecuting PPP Fraud May Be Harder Than It Seems
For anyone following developments in the massive small business stimulus program known as the Payroll Protection Program (PPP), May 14 was an important date. That was the deadline imposed by the Treasury Department and Small Business Administration (SBA) for arguably undeserving recipients of PPP loans to return the funds "no questions asked." According to Treasury Secretary Steven Mnuchin, the IRS and SBA will be auditing all loans in excess of $2 million and will be prosecuting instances of fraud.
The government will no doubt seek to make examples of undeserving PPP loan recipients. The government has a number of tools in its arsenal for doing so. Indeed, the first criminal fraud charges stemming from the PPP program have already been brought in the District of Rhode Island in U.S. v. Staveley, 1:20MJ34LDA (D. RI). That appears to have been a clear case of fraud involving phantom employees for several businesses, at least one of which the defendants did not even own. The more difficult, and likely more common, case arises from those borrowers who otherwise would be eligible under the PPP but whose economic need for the loan may be questionable.
This article discusses what tools the government has for pursuing seemingly undeserving PPP borrowers, the obstacles to bringing such cases, and the factors that may influence the government's decision in pursuing criminal or civil cases.
The PPP
The current situation should come as no surprise given the circumstances in which the PPP was passed. The PPP is part of the CARES Act, which was signed into law on March 27, 2020, two weeks to the day after President Trump declared the coronavirus pandemic a national emergency, with states across the country issuing shelter in place orders. With the need to get stimulus funds into the hands of business owners immediately, corners were cut and restrictions were relaxed. Congress dispensed with the public comment period under the Administrative Procedures Act. Vetting requirements associated with the loan applications were relaxed. Most significantly, the PPP declared that the requirement contained in the Small Business Act that borrowers attempt to "obtain credit elsewhere" prior to seeking an SBA loan was inapplicable to PPP loans. See 15 U.S.C. §636(a)(36)(I).
This premium content is locked for Entertainment Law & Finance subscribers only
ENJOY UNLIMITED ACCESS TO THE SINGLE SOURCE OF OBJECTIVE LEGAL ANALYSIS, PRACTICAL INSIGHTS, AND NEWS IN ENTERTAINMENT LAW.
- Stay current on the latest information, rulings, regulations, and trends
- Includes practical, must-have information on copyrights, royalties, AI, and more
- Tap into expert guidance from top entertainment lawyers and experts
Already a have an account? Sign In Now Log In Now
For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473
Major Differences In UK, U.S. Copyright Laws
This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.
The Article 8 Opt In
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
Strategy vs. Tactics: Two Sides of a Difficult Coin
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
Legal Possession: What Does It Mean?
Possession of real property is a matter of physical fact. Having the right or legal entitlement to possession is not "possession," possession is "the fact of having or holding property in one's power." That power means having physical dominion and control over the property.
The Anti-Assignment Override Provisions
UCC Sections 9406(d) and 9408(a) are one of the most powerful, yet least understood, sections of the Uniform Commercial Code. On their face, they appear to override anti-assignment provisions in agreements that would limit the grant of a security interest. But do these sections really work?