PPP Loan and CARES Act Fraud
What Is the Paycheck Protection Program?
The Paycheck Protection Program is a government loan program established through the CARES Act for businesses who employ less than 500 people to gain assistance because of the impact of COVID-19. Small businesses are eligible for up to $10,000,000 to cover expenses such as payroll, mortgages, rent and utilities. The debt is forgivable if the money goes towards these “qualified expenses”.
What is PPP Loan Fraud or CARES Act Fraud?
Committing PPP loan fraud is to take advantage of the loan program and CARES Act by dishonestly obtaining money. You may face guilt of PPP loan fraud if you purposely obtain or attempt to obtain funds through the CARES Act.
What Are Examples of PPP Loan Fraud?
- Claim the incorrect number of employees to qualify for the loan.
- Wrongfully claiming that COVID-19 impacted your business.
- Increasing payroll costs to get an increased amount of funding.
- Using the funds for anything other than qualified expenses
- Failure to identify an employee that left in order to continue receiving funds on their behalf.
How Can I Avoid Paycheck Protection Program Loan Fraud Charges
PPP loan fraud and CARES Act violations are serious crimes. They can have severe legal consequences. Given the importance of the PPP program and its role in supporting businesses during the COVID-19 pandemic, it is important to follow the program rules. However, if authorities accuse you of PPP loan fraud, it is important to contact professional legal counsel immediately to protect your rights.
Understand the terms and conditions of the program. This is the first step in avoiding violations. You should only use a PPP program loan for qualifying expenses. For example:
- employee salaries
- rent
- utilities.
And other expenses that help keep the business afloat during a pandemic. Misuse of funds or providing false information to obtain a loan is considered fraud.
Filing errors. Often, potential fraud allegations arise not from malicious intent, but from simple reporting errors. For example, misstating the number of employees or overstating payroll costs can appear as fraud. It is important to carefully review all information on the filing form to avoid mistakes that could lead to charges. Demonstrate good faith. If authorities accuse you of PPP loan fraud, presenting evidence of good faith may be key to your defense. For example, if you made mistakes inadvertently and without intent to defraud the program, this may provide grounds for acquittal. It is also important to preserve all documents and correspondence with financial institutions. Incorrect data in reports or bank statements can lead to suspicions of fraud.
What to do if you are accused of fraud. It is important to seek legal counsel immediately. The attorneys at KAASS LAW can help you understand complex legal issues and develop a defense strategy. Loan fraud charges can result in serious fines and jail time. Therefore, it is important to act quickly and effectively. The assistance of an attorney in such a situation can significantly affect the outcome of the case. An attorney can:
- gather evidence
- prepare all necessary documents
- represent your interests in court
What Are the Penalties for PPP Loan Fraud?
Under the Small Business Act, PPP loan fraud is charged as a federal crime. If convicted for making false statements or overvaluing securities you face felony charges punishable by:
- Fine up to $5,000 and/or
- A 2 year sentence in a federal prison.
If a person faces embezzlement charges under PPP loan fraud, they may face:
- A fine up to $10,000 and/or
- A federal prison sentence of 5 years.
Defenses against a PPP loan fraud violation may include:
- Intent is important. Defendants cannot be charged if they had no intent to defraud. For example, making a mistake on the complicated loan application could be a result of the violation. If you did not intend to defraud and simply made a mistake, the law does not charge you with fraud.
- An SBA mistake in communications, bank statements, accounting notes, receipts and even bills could seem like there is fraud occurring under a PPP loan. It is important to keep all data as reference in case there is a mistake in one of the weeks.
The Office of the Special Inspector General for Pandemic Recovery is in charge of all PPP loan fraud investigations. All charges are prosecuted by the Department of Justice. Remember that even if your intention was not to commit fraud, legal defense is necessary to minimize risks. If you need advice on PPP loan fraud, contact the attorneys at KAASS LAW. We will provide you with professional assistance and protection of your interests. You may call our office at (310) 943-1171 or by filling out the contact form below. [contact-form-7 id="5673" title="KAASS LAW Contact Form"]
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Prescription drugs play a vital role in managing health conditions, but they can also be misused and abused. California law takes a strong stance against prescription fraud, including forging or altering prescriptions. These actions not only endanger public health but also carry severe legal consequences. At KAASS LAW, we understand the complexities of prescription drug laws and are committed to providing accurate legal information and representation. The following will explore the legal ramifications of forging or altering a prescription in California, outlining the potential charges, penalties, and defenses.
Forging or Altering a Prescription in California
Under California Business and Professions Code Section 4324 it is illegal to forge or alter a prescription, or possess drugs acquired through a false prescription. It is a crime in California to forge a prescription or make an attempt to gain possession of prescription drugs. However, in case a person actually got medication as a result of forging a prescription, he will be also liable under Business & Professions Code Section 4324(b). A person can be convicted of both offenses i.e. forging the prescription and obtaining the medication through false prescription.
To Be Convicted of California Business and Professions Code 4324 Forging or Altering a Prescription Prosecution Must Prove
The prosecution must prove the following elements to convict the defendant of forging or altering a prescription:
- defendant falsely made, forged altered, or counterfeited a prescription;
- gave another person a forged or fictitious signature;
- used or attempted to use with a forged or fictitious signature; and/or
- The defendant committed that act with the intent to defraud
Forging a Prescription
Prescription forgery is the use of a falsified prescription for purchasing drugs illegally. Forging or altering a prescription is making, publishing, uttering, passing, or attempting to pass a prescription for drugs or possessing drugs acquired by a false prescription. Attempting to transfer another person a falsified prescription, even if you didn’t actually write it, is also a crime.
What is Considered to be a Prescription?
Prescription is an instruction to provide drugs, either by phone, through writing, or through electronic communications (i.e., facsimile). Generally, a valid prescription must include the following information:
- Patient’s name
- Name and quantity of prescribed drug
- Directions on how to use the drug
- Date of issue
- Contact information of doctor or prescriber
- Doctor’s or prescriber’s signature
The Term "Drug" Under Business and Professions Code Section 4025
The term “drug” under California Business and Professions Code Section 4025 include:
- prescription drugs;
- veterinary drugs; and
- drugs without a prescription.
“Uttering” Under Business & Professions Code Section 4324
The defendant is guilty of falsely uttering a prescription in situations where the defendant:
- Used or attempted to use a forged drug prescription; and/or
- Conveyed or indicated through his words or conduct that the prescription was genuine
Defenses to Forged Prescription B&P Code 4324
Some common defenses to charges related to forged prescriptions
- The defendant had the authority to sign the prescription;
- Defendant did not forge or alter the prescription;
- Defendant did not use the forged prescription; and/or
- The defendant isn't aware the prescription is under forgery
The penalties for violating California Business and Professions Code Section 4324
Business and Professions Code section 4324 forging or altering a prescription is considered a "wobbler offense". As such, the offense can be charged as either a misdemeanor or a felony, depending on the defendant’s criminal history, as well as other factors.
The penalties for a Misdemeanor Business and Professions Code 4324 Conviction
Penalties for misdemeanor Business and Professions Code 4324 conviction include:
- Up to one year in county jail;
- A fine of up to $1,000; and/or
- Misdemeanor probation
The penalties for a Felony Business and Professions Code 4324 Conviction
Penalties for felony Business and Professions Code 4324 conviction include:
- 16 months, two or three years in county jail;
- A fine of up to $10,000; and/or
- Felony probation;
Furthermore, additional penalties a defendant can face include the following:
- Community service or labor;
- Permanent firearm restriction; and/or
- Immigration consequences;
The Importance of Legal Representation
If you're facing charges for prescription fraud, it's crucial to have experienced legal representation. A skilled criminal defense attorney can:
- Investigate the charges: Thoroughly investigate the circumstances of the alleged offense and gather evidence to support your defense.
- Challenge the evidence: Challenge the admissibility of any evidence as illegal or is unreliable.
- Negotiate with the prosecution: Negotiate with the prosecution to seek a reduction or dismissal of the charges.
- Represent you in court: Provide a strong defense in court and protect your rights throughout the legal process.
KAASS LAW: Your Defense Against Prescription Fraud Charges
At KAASS LAW, we understand the serious consequences of prescription fraud charges. Our attorneys dedicate to protecting your rights and fighting for the best possible outcome in your case. If you are under accusation with forging or altering prespeciptions, contact us today for a free consultation. We'll review your case, explain your legal options, and develop a strong defense strategy to protect your future. Moreover, any matters involving a wrongful death due to prescription drugs, please contact us today.
Forging or Altering a Prescription in California Video
[embed]https://www.youtube.com/watch?v=6uRUMZSCoLI[/embed]
Unemployment insurance fraud occurs when an individual provides false, incomplete or misleading information, intentionally conceals facts or provides wrong identification for obtaining, increasing or denying benefits.
California Unemployment Insurance Laws and The EDD
In California the Employment Development Department (EDD), which is a combination of both state and federal programs, is managing unemployment benefits system.
California unemployment insurance assists people who become unemployed through no fault of their own to keep financial security while they seek new job. There are some circumstances under which a person can qualify for benefits.
- Person is currently unemployed or have had his hours cut to below full time
- Person’s last day of employment was not more than eighteen months ago
- Person is ready and willing to work but is unable to find a job
- Person is actively searching new employment
A person can recover a maximum of $450 per week and the program can’t last more than one year.
Types of Unemployment Insurance Fraud in California
In California both employees and employers can be accused of committing unemployment insurance fraud.
Here are some examples of unemployment insurance fraud committed by employees:
- Double dipping - collecting benefits and not reporting to the EDD.
- Failing to actively seeking new job but claiming you are diligently looking for work
- Failing to report other forms of compensation you are receiving such as social security, pension payments and workers comp
- Collecting benefits from different states simultaneously
- Lying about the reasons of becoming unemployed
- Working and continuing to receive unemployment benefits
- Giving wrongful information to qualify for unemployment benefits
Unemployment Insurance Fraud Committed Employers
Employers are committing unemployment insurance fraud when they try to deny benefits to a former employee for defrauding the EDD, these include:
- Purposefully withholding deductions and failing to paying them to the EDD
- Intentionally providing wrongful information about the unemployment claim, such as why the employee was no longer working or about the wages the he was receiving
California Unemployment Fraud Investigation Process
The California EDD collects information mostly from public fraud report hotline and their field offices that gather unemployment fraud applications.
After gathering information EDD assigns alleged cases to a special investigation unit. In case unit manages to find adequate evidence that fraud has taken place they are will file unemployment insurance fraud charges. If they don’t get enough evidence they will drop the case or work for obtaining further information.
Penalties for California Unemployment Insurance Fraud
Unemployment insurance fraud is considered a wobbler and can be charged as either a misdemeanor or a felony, based on the case circumstances, the amount of the fraud and the defendant's criminal history. Defendant can be charged either under Unemployment Insurance Code Section 2101 or California Penal Code Section 550 (PC 550).
Unemployment Insurance Code Section 2101
Pursuant to the California Unemployment Insurance Code Section 2101 (a): It is a violation of this chapter to willfully make a false statement or representation, to knowingly fail to disclose a material fact, or to use a false name, false social security number, or other false identification to obtain, increase, reduce, or defeat any benefit or payment, whether for the maker or for any other person, under any of the following statutes administered by the department:
Penalties for Misdemeanor Conviction: Unemployment Insurance Code Section 2101
Penalties for misdemeanor conviction for violating Unemployment Insurance Code Section 2101 include the following:
- Up to one year in a county jail
- A fine up to $20,000.
Penalties for Felony Conviction: Unemployment Insurance Code Section 2101
Penalties for felony conviction for violating Unemployment Insurance Code Section 2101 include the following:
- Sixteen months, two or three years in California state prison
- A fine up to $20,000
General Insurance Fraud: California Penal Code 550 (PC 550)
Penalties for Misdemeanor PC 550 Conviction
In case the total amount of the fraud is $950 or less the crime is considered a misdemeanor, punishable by:
- Up to six months in a country jail
- A fine up to $1,000
In case the total amount of the fraud is more than $950 the crime is considered wobbler.
Penalties for Felony PC 550 Conviction
- Two, three, or five years in a country jail
- A fine up to $50,000 or double the total amount of the fraud, whichever is greater
Are you in need of legal assistance as a result of being charged for unemployment insurance in California? A criminal defense attorney in your area may be able to provide you with the help that you need.
Under California Welfare and Institutions Code Section 10980 welfare fraud is an act of unlawfully obtaining welfare benefits from the government by intentionally submitting false information or withholding relevant information or.
Forms of Welfare Fraud Under California W&I Code 10980
According to California W&I Code 10980, defendant can commit welfare fraud in different forms, including:
- Defendant deliberately misstated information for receiving benefits
- Defendant failed to provide relevant information for receiving benefits
- Defendant used more than one name when applied for the benefits
- Defendant filed numerous applications for obtaining multiple benefits
- Defendant purchased, used, transferred or possessed counterfeit food stamps
Types of California Welfare Fraud
Generally California welfare fraud can be classed to two main types: recipient welfare fraud or internal fraud.
What is Considered as Recipient Fraud in California?
Recipient fraud involves any attempt to receive, secure, retain, or increase a benefit by means of submitting wrongful, incomplete or misleading information. Recipient fraud examples include:
- Not reporting additional income or benefits.
- Claiming a fictitious or ineligible child.
- Claiming to be a single dad or mom when both parents actually live at the same residence.
- Collection benefits from two states at the same time.
What is Considered as Internal Fraud in California?
Internal fraud is committed by an employee of a government welfare agency. This occurs when the workers are unlawfully disbursing welfare benefits to themselves, their family members or friends.
California Welfare Fraud Investigation Process
Prosecuting agencies in California receive welfare fraud cases from different sources, as public hotlines and websites, local agencies and any other agencies that suspect welfare fraud. Welfare fraud investigations start from gathering evidence and information in welfare fraud cases, including:
- Contacting and speaking directly with welfare benefit recipients
- Contacting and speaking with family members, friends, co-workers, employers
- Examining welfare benefit applications and person’s income trends.
The investigator presents relevant information to a deputy district attorney who will determine whether a criminal filing is appropriate or not. District attorney can do one of the following:
- File criminal charges under WIC Section 10980
- Return the case to the investigator for gathering more information,
- Reject the case
Penalties for Welfare and Institutions Code 10980 Conviction
According to California WIC Section 10980, welfare fraud is a wobbler and can either be filed as a misdemeanor or felony crime and the type of charges depend of the value of benefits defendant’s criminal history.
False or Misleading Statements in Welfare Fraud
In case the defendant made false or misleading statement for obtaining benefits, he will face:
- Up to six months in a jail and
- A fine of maximum $500
Fraudulent Application in Welfare
Defendant will be convicted for feeling fraudulent application in case:
- He has filed multiple applications,
- He has applied for benefits under a fake name or false identification or
- He has filled application for a fictitious person
Penalties for Felony Welfare and Institutions Code 10980 Conviction
Fraudulent application can be charged as a misdemeanor or felony offense. Penalties for felony Welfare and Institutions Code 10980 conviction include:
- Sixteen months, two or three years in a county jail,
- A fine up to $5,000
Penalties for Misdemeanor Welfare and Institutions Code 10980 Conviction
Penalties for misdemeanor Welfare and Institutions Code 10980 conviction are the following:
- Up to one year in a jail,
- A fine up to $1,000
Fraudulently Obtaining or Retaining Benefits
In case the total value of the benefit is $950 or less obtaining or retaining fraudulent benefits is a misdemeanor, and is punishable by:
- Up to six months in jail,
- A fine up to $500
In case the total value of the benefit was more than $950, the defendant will face felony, punishable by:
- Sixteen months, two or three years in a county jail,
- A fine up to $5,000
California Food Stamp fraud
Selling, buying, or misusing food stamps is a misdemeanor in case the amount involved was $950 or less, punishable by
- Up to six months in a jail
- A fine up to $500
In case the value is more than $950 the defendant will face felony, punishable by
- Sixteen months, two or three years in a jail
- A fine up to $5,000
People convicted of welfare fraud may lose their professional license, job, become disqualified to receive future welfare benefits.
California Welfare Fraud Defense Lawyer
Our California welfare fraud defense lawyers are here to answer any questions If you or a loved one has been charged with Welfare and Institutions Code 10980 and you would like to discuss your case confidentially with one of our criminal defense lawyers at (310) 943-1171.
