Government fraud involves illegal actions intended to divert funds from designated causes or programs. In Florida, fraud cases are handled carefully and punished severely, but government fraud like misuse of PPP loans, may also have federal consequences. Keep reading for more information.
What Is Government Fraud?
Government fraud is a term used to describe fraudulent activity associated with federal government contracting and fraud related to federally funded entitlement programs. These programs include public housing, agricultural programs, defense procurement, education, and more. In most cases, fraud is used to gain access or divert funding from the programs for personal gain.
PPP Loan Fraud
For example, in 2020 the government passed the CARES Act. The law provided more than $2 trillion in economic relief from the economic impact of the global COVID-19 pandemic. A part of this aid was allotted to forgivable loans for small businesses. These loans, called PPP loans after the Paycheck Protection Program, received an additional $321 billion in funding throughout the height of the pandemic.
PPP loans not only gave small businesses a longer financial runway during shutdowns, but they also ensured that business owners would not have to shut down permanently or lay off workers to combat financial hardship.
However, by 2021 cases involving PPP loans began to rise. Two Florida men pleaded guilty for fraudulently obtaining over $35 million in PPP loans in December 2021. This case was one of many that involved falsifying documents to obtain the loans or creating business entities to which a person or group would claim as qualifying for government relief.
Other Types of Government Fraud
Fraud is not limited to government assistance programs or businesses. Other government fraud schemes include:
- Qui Tam: Employees or managers engage in illegal acts at work. These individuals violate the False Claims Act and may be subject to litigation by whistleblowers.
- Healthcare Fraud: Medicare and Medicaid are provisionary ‘insurance’ programs that some companies manipulate to gain profit. A party may overestimate treatment expenses or refuse to submit reimbursements.
- Bank Fraud: Identity theft, credit card, and bank fraud involve manipulation of the banking or credit system or the use of stolen information to impersonate a consumer and/or use their financial resources without their knowledge or consent.
- Housing Fraud: Individuals may abuse housing subsidies and grants for federal housing or reallocate the funds to private accounts.
Depending on the sector in which the fraud is committed, specific government agencies may oversee the case and enact penalties against scammers. For example, housing fraud is reported to the Department of Housing and Urban Development while healthcare fraud may be under the purview of the Centers for Medicare & Medicaid Services or the Federal Bureau of Investigation.
Fraud in Florida
In general, the penalties for fraud depend on the value of funds/assets that were defrauded. In other words, the amount of money obtained through fraudulent activity can increase the penalties. Most fraud cases involving stolen property or financial assets valued at $50,000 or more are considered first degree felonies and are punishable by 30 years in prison and fines up to $10,000.
In a more recent Florida PPP loan fraud case, the charges carried a maximum penalty of 20 years in prison and a fine of up to $250,000 or twice the gross gain to the defendant or gross loss to their victim whichever is greater.
Ultimately, penalties for fraud may vary especially if the defendant is charged with wire fraud or additional criminal charges.
Government Fraud Legal Help
If you have been accused of government fraud, you could be facing state and federal charges. Fraud is a complicated crime as are the punishments and it is crucial that you enlist the help of an attorney. A lawyer can evaluate your case and determine the most optimal strategy based on your unique circumstances. Attorneys also advocate for their clients in court.
Have you been accused of fraud? Contact The Hoffman Firm for legal counsel you can trust.