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Feds Turn Up the Heat on PPP Fraud: What's Behind the Crackdown

Posted by Joseph D. Lento | Feb 01, 2025 | 0 Comments

If you thought the Paycheck Protection Program (PPP) was a lifeline to get through the pandemic, think again. The U.S. government is turning up the heat, and suddenly, those quick applications for emergency funds are back in the spotlight. Yep, the PPP fraud crackdown is real, and the feds are on the hunt for businesses that may have bent—or outright broken—the rules.

You've probably heard whispers about a "PPP Arrest List" floating around, but here's the real story: the Department of Justice (DOJ) is intensifying its investigations, and businesses are feeling it. It's not just about obvious fraud anymore—the feds are targeting technical slip-ups. Whether it's misusing PPP funds or messing up the employee count, those "apply now, ask questions later" mistakes are getting a second look.

Here's the bright side: if you act fast and get the right legal team in your corner, you can dodge the worst of it. You don't have to face this storm alone. At the Lento Law Firm, we defend businesses caught in these investigations with the experience and know-how to help you come out clean. Contact us here or at 888.535.3686

What's Really Happening With the PPP Crackdown?

Let's set the stage: The government approved $793 billion in PPP loans between 2020 and 2021, with most of that money forgiven if businesses used it correctly. The goal was clear—keep small businesses afloat and people employed during an unprecedented crisis. But now, the feds are starting to look under the hood.Yes, they're going after big players who lied about their financials or flat-out scammed the system, but they're also targeting smaller businesses for things like:

  • Misleading Eligibility: Did you miscalculate your employee count or misstate the "necessity" of the loan? That's a red flag.
  • Improper Use of Funds: PPP money was meant for payroll, rent, and utilities. Using it for anything else could put you on the feds' radar.

The SBA's guidelines were confusing and constantly changing. Mistakes were easy to make. And now, the government is asking tough questions.

The Rumors Are Real, But Don't Panic Yet

There's been a lot of talk about a so-called PPP Arrest List, but don't let those rumors freak you out. The truth is the government is investigating thousands of businesses, but arresting people isn't the first step. Typically, the DOJ sends out investigative demand letters, asking businesses to hand over documents like their loan applications, payroll records, and financial statements.

What's really happening is a massive, government-backed audit. If you're one of the unlucky businesses that the feds decide to investigate, you'll probably be asked to explain any discrepancies or provide evidence that you followed the rules.

Is Your Business in the Crosshairs?

If you've received a letter from the government or are hearing rumors about a possible audit, don't ignore it, and don't panic. The government is gathering information, not making accusations yet. There's time to respond. But this is too big to tackle solo. A criminal defense attorney who knows the ins and outs of white-collar crime and federal investigations can guide you through the process and help minimize the fallout.Your first step is to collect everything you submitted for the loan—applications, payroll reports, financial statements, and any communications with the SBA. Having all the info will help you explain your side.

Don't Wait for the Knock on the Door – Contact the Lento Law Firm Team Now

If you've received a notice or suspect you might be under investigation, don't wait until it's too late. Call the Lento Law Firm Criminal Defense Team today, and we'll help you navigate the complexities of the PPP investigation process with confidence. Your business deserves the best defense—and that starts with the Lento Law Firm, a trusted partner in protecting your future.

Contact us here or at 888.535.3686 for help.

About the Author

Joseph D. Lento

"I pride myself on having heart and driving hard to get results!" Attorney Joseph D. Lento passionately fights for the futures of his clients in criminal courtrooms in New Jersey and nationwide. He does not settle for the easiest outcome, and instead prioritizes his clients' needs and well-being. With unparalleled experience occupying several roles in the criminal justice system outside of being an attorney, Joseph D. Lento can give you valuable behind-the-scenes insight as to what is happening during all phases of the legal process. Joseph D. Lento is licensed in New Jersey and New York, and is admitted pro hac vice as needed nationwide. In the courtroom and in life, attorney Joseph D. Lento stands up when the bell rings!

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When it comes to criminal defense cases, you need the right person in your corner. To learn more about how Mr. Lento can help you, call the Lento Law Firm today at 888-535-3686. or contact him online.

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