FEDERAL INVESTIGATIONS OF PPP LOANS IN NEW JERSEY

The Coronavirus Aid, Relief, and Economic Security (CARES) Act was enacted on March 29, 2020, to provide emergency financial assistance to millions of Americans suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of up to $349 billion in forgivable loans to small businesses for job retention through PPP loans for payroll costs, interest on mortgages, rent and utilities. The PPP allows the interest and principal on loans to be forgiven if the business used the proceeds on eligible expense in accordance with the law.

The Department of Justice is now investigating PPP loans in New Jersey and throughout the country pursuant to the federal False Claims Act, common law theories of overpayment and breach of contract, the equitable theory of unjust enrichment, and other potential causes of action. In addition to potential criminal charges for intentional fraud, the False Claims Act permits the United States to recover treble damages, or three times the amount of its loss. In addition, the United States may recover penalties of over $10,000 per individual false claim or individual document falsified in support of a false claim, to the extent the documentation was falsified.

Dughi, Hewit & Domalewski, P.C. is ready to assist individuals and companies in connection with a federal criminal or civil investigation regarding the Paycheck Protection Program. Each case needs to be examined individually to determine the potential applicable defenses. If you have received a Notice of False Claims Act investigation regarding a PPP loan that you or your company received, please call or email Craig A. Domalewski or Brandon D. Minde for a consultation.