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Federal emergency relief legislation, such as the Coronavirus Aid, Recovery, and Economic Security Act (“CARES Act”), has allocated more than $2 trillion to individuals, businesses, and other entities to reduce the financial uncertainty caused by the COVID-19 crisis. However, the fallout has yet to be predictable.

Many companies receiving SBA loans via the Paycheck Protection Program (“PPP”) face allegations of fraud in the federal loan qualification process. Allegations include application fraud in the initial, receipt of loan proceeds, funds transfer to personal or overseas bank accounts, and unauthorized use of funds.

In fact bank fraud carries a maximum penalty of 30 years in prison and a $1 million fine, or twice the gross gain to the defendant or gross loss to the victim, whichever is greater. False representation of Social Security number carries a maximum penalty of five years in prison and a $250,000 fine, or twice the gross gain to the defendant or gross loss to the victim, whichever is greater. Money laundering carries a maximum potential penalty of 20 years in prison and a $500,000 fine, or twice the gross gain to the defendant or gross loss to the victim, whichever is greater.

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