When COVID-19 hit last March, many small businesses suffered immediate losses and an uncertain future. In response to their struggles, Congress passed the CARES Act to provide economic relief to those impacted by the pandemic, including small businesses. As part of that program, the Economic Injury Disaster Loan (EIDL) program was expanded to offer $10 billion for immediate EIDL grants of up to $10,000 each to qualifying small businesses and an additional 2.5 million loans, totaling approximately $150 billion.
However, it appears that up to $250 million may have been given out to ineligible recipients. If you have been accused of fraudulently applying for an EIDL grant, you could face serious federal charges and severe consequences. No matter how confident you are that you are innocent and will be acquitted, you need to hire a lawyer as soon as possible. Miami federal defense attorney Danny Izquierdo believes that everyone accused of a crime deserves an aggressive defense.
How Did the Federal Loan Program Go So Wrong?
Along with the Paycheck Protection Program (PPP), the EIDL program was overwhelmed with millions of applications and ran out of available funds pretty quickly. Applications were accepted, reviewed, and approved so quickly that many mistakes were made. Because the agency couldn’t handle the number of applications they got within just a few days, they outsourced the decision-making to private banks. Soon after the grants and loans were distributed, the Small Business Administration (SBA) began receiving reports from banks and law enforcement agencies about suspicious activity, including the following:
- Use of stolen account identities
- The inability to explain the origin of the business name on the application
- Attempts to transfer program funds to investment and foreign accounts
- Accounts opened solely for the deposit of program funds
- Deposits of program funds to third parties
- Businesses that were registered after the January 31 application cutoff
- Single businesses receiving multiple EIDL loans
Even though the interest rate on EIDL loans was higher than that for PPP loans, it was a popular program because the money could be used more flexibly. The EIDL program has been around for many years to help businesses impacted by natural disasters. The money can be used to pay fixed debts, payroll, accounts payable, and other liabilities. Loans taken under the Paycheck Protection Program could only be used to make payroll. As with any opportunity to make money, people naturally tried to take advantage of these programs, and some knowingly committed fraud to get the money.
You Deserve a Competent Defense Attorney If You Are Charged
So, whose fault is it when someone who shouldn’t have applied is approved? The feds believe it is the applicant’s fault and that they should be prosecuted for fraud. If you were granted an EIDL grant or loan and have since been accused of fraud, you deserve a chance to defend yourself. Maybe you mistakenly thought you were eligible. Maybe you unknowingly used the funds in an unapproved way. Maybe the government violated your rights in investigating you for fraud. There are multiple potential defense strategies available if you are facing federal fraud charges. When you meet with attorney Danny Izquierdo, he will listen to your story, discuss defense options, and be honest with you about the potential consequences you face.
Charged With A Federal Crime In Florida? Izquierdo Law Is Here for You in Miami
If you have found yourself in need of an experienced federal criminal defense attorney in Miami, you should contact us as soon as possible. Please feel free to contact me online or to call my Coral Gables office directly at 305.707.7345. You can also request my free book, The Ultimate Guide to Fighting Criminal Charges in Florida, a detailed download discussing the myths, rumors, and hearsay often associated with criminal charges. This book also explains what to expect from your criminal court proceedings and the important steps you must take to put up a successful fight. It is a valuable resource for defendants and their families in South Florida.