What to Do if I’ve Been Charged With EIDL Loan Fraud?

As a business owner or individual facing the crisis of the pandemic, many have sought government aid in hopes of receiving relief. With the help of the federal government and their small business protection plans, organizations that would have succumbed to the harsh effects of the pandemic have remained afloat with doors open and employees maintaining a livelihood. With the number of funds disbursed for disaster relief reaching record-breaking levels, the FBI has cracked down with thorough investigations of patrons who have taken advantage of those grants for their own delight instead of their personal businesses. From an employer’s standpoint, it may seem beneficial and almost simple to obtain an SBA, PPP, or EIDL loan to manage the business, pay for continuous expenses like rent and payroll, all while avoiding permanent closure of the company. If this is the case, any of these loans could assist. Any ill-will or abusive intentions to procure government aid can result in harmful consequences that will not only affect an owner’s business but their individual finances as well. This article delves into the process of business fraud and what to expect if you have been charged with EIDL loan fraud in the San Diego area.     

What Is an EIDL Loan?

The Economic Injury Disaster Loan Program (EIDL) is a federal government loan provided to small businesses during times of world peril or disastrous conditions. Conditions that would warrant disaster aid are ones like tornadoes, hurricanes, or even the coronavirus world pandemic. Natural causes that completely, stop, hinder, or prevent a business from keeping its doors open are all justifications for economic relief. There are different types of small business administration (SBA) loans that range in value and payment methods. Owners applying for an EIDL loan are eligible for up to $2 million based on the amount of economic injury suffered. Any companies that applied early in the application process were also eligible for an EIDL advance of $1000 per employee with a maximum of up to $10,000 dispersed. This advance does not need to be repaid. 

How Does an EIDL Investigation Work?

If a business is charged with EIDL fraud or undergoing an audit process, the federal government believes that the application was filed under false pretenses. Whether a business owner intentionally or unintentionally made false claims on an application, they must go through the process of providing all documentation and billing that the funds were disturbed towards. Failure to show proof of proper fund use could mean shutting down a business, and the company’s executives facing criminal theft charges for counterfeit claims. Before applying for a loan, all borrowers must certify that the conditions for the loan are met before approval. Some of the conditions that the federal government investigates are:

• Returns used solely for business matters as specified (payroll, rent, and utility, etc..)
• If economic strife prohibits the owner from running smooth business operations
• Funds are allocated to employees and operational expenses like mortgage payments 
• All documents and forms are valid and up-to-date from the time of the application

These are just a few of the certifications for securing an EIDL loan under SBA rules and policies. It is important to review the overall terms of the loan prior to applying to evaluate the risk for criminal charges. If certain loan claims raise red flags, it is on the business owner to prove that all the provisions of the agreement were met, or hire a criminal defense lawyer to assist with the false allegations made. 

How to Avoid Jail Time for an EIDL Loan Fraud

First and foremost being honest is the initial step in avoiding jail time if you’ve been charged with EIDL loan fraud. Not every audit and case is criminal, certain businesses can undergo random audits due to minor mistakes or confusion from the time the applicant filed. You can avoid jail time by: 

• Ensuring every statement and document on your claim is authentic and exact 
• Managing written proof and filing systems showing where the funds have been dispersed since receiving 
• Using the funds for their intended purpose only, avoid using even the slightest amount for gain like lavish expenses or paying off personal credit card/mortgage debt

If you’ve recently been subpoenaed for an investigation for your EIDL loan, seek legal advice from a skilled attorney. Attorneys can properly advise you and assist in weighing your options. 

What Can a Criminal Defense Attorney Do for You? 

A criminal defense attorney can help you research the facts, do thorough investigations and most importantly negotiate the terms of the agreement. Violating the terms and trust of your loan is a serious issue and without the proper representation, an offender could face up to 30 years in federal prison with over $1 million in criminal fees. The criminal defense attorneys at Vikas Bajaj Law offices located in San Diego are here to help with your case and get you the best possible outcome. Contact our office today for an initial consultation.