Federal Litigation on PPP, EIDL, and Unemployment Is Rising

Federal prosecutions across the country have increased dramatically against businesses and individuals accused of fraud under the CARES Act. Losses associated with improperly used or gained stimulus money has reportedly exceeded $569M.

The Attorney General has stated that the Department of Justice is currently targeting

1 – PPP Loan Fraud
2 – EIDL Loan Fraud
3 – Unemployment Insurance Fraud

Initially, prosecutions for abuse on the PPP focused on those who fraudulently obtained these loans, or who used funds in an improper way. In addition, the DOJ has stated that it is using the False Claims Act to take back ill-received PPP Loan money when a borrower has not applied for forgiveness.

Although significantly underreported, Unemployment Claim fraud has increased exponentially during the pandemic. The expansion of the CARES act and additional PUA Assistance has made it much more appealing to criminal elements.

A common fact pattern for UI fraud involves using personal data from third parties which might include diseased individuals, the elderly, or incarcerated individuals to apply for and receive unemployment benefits. As a result, additional US Attorneys and investigators have been hired to prosecute this type of fraud.

An example of a case is a woman in Virginia who was sentenced to nine years in prison and ordered to pay $455,000 in restitution following a guilty plea for fraudulently filing UI claims on 37 individuals. This is a continuing story. Much more will follow.

Let me leave you with this.

Chicago announced a new indoor mask mandate for all citizens regardless of their vaccination status to begin Friday, August 20, 2021, for individuals two years of age and older. Last Monday, we passed the 7 day rolling average mark of 400 new cases daily which moved us into the “high” transmission category which signalled the change.

Here we go again.

This does not apply to outdoor activities. Nor does it change any of the occupancy percentages now in place.

The question becomes what’s next?

The union and the public school system are again fighting about reopening the classrooms. Are they going to be slowly shutting things down again? Fall is right around the corner, and we all know what happens when the seasons change.

Everyone gets the flu.

I’ve said it before, and I’ll say it again. You need to be ready. Have your plans in place. Knowing what you’re going to do, no matter what their response happens to be is vital. It’s the surprises in life that make entrepreneuring difficult.

No matter what happens, know that we are here. You’re not in this alone. We’re all going to get through this. Let’s get through it together.

Accounting Solutions Ltd. stands ready to complete our mission and purpose of protecting you, your family, and your business. Whether you need help with a PPP Loan, Employee Retention Credits, Payroll Services, or Bookkeeping and Tax Work, you can rely on us. I’m here and I remain,

Sincerely yours,

Chris Amundson
Accounting Solutions Ltd.


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