Paycheck Protection Program Fraud FAQ

Check out some of DiCello Levitt’s most frequently asked questions concerning paycheck protection program fraud and paycheck protection program fraud whistleblowers.

What is the Paycheck Protection Program (PPP)?

The Paycheck Protection Program is a low-interest loan program developed in the COVID-19 crisis to help companies keep workers employed and stay in business during the pandemic. PPP loans were issued in 2021 in two “draws.”

First Draw loans were primarily intended to fund payroll costs and employee benefits.

Up to 40% of the loan funds were eligible for use on mortgage interest, rent, utilities, costs to protect workers from COVID-19, uninsured property damages caused by looting or vandalism in 2020, and certain other operational expenses. 

Second Draw loans were made to eligible borrowers who had received a First Draw loan under the same general terms.

However, the Second Draw increased the maximum loan amount available to the accommodation and food services sector from 250% of the average monthly 2019-2020 payroll costs (capped at $2 million) to 350%.

To qualify for the Second Draw, a borrower was required to show that it:

  • Received a First Draw PPP loan and used the full amount for authorized uses
  • Had no more than 300 employees, and
  • Had at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020.

What is required for PPP loan forgiveness?

PPP borrowers are eligible for loan forgiveness when they meet certain terms and conditions.

If during the 8- to 24-week covered period following loan disbursement, the employer meets certain guidelines, PPP loans are eligible for forgiveness.

  • Employee and compensation levels are maintained
  • The loan proceeds are spent on payroll costs and other eligible expenses, and
  • At least 60% of the proceeds are spent on payroll costs. 

Borrowers can apply for loan forgiveness after all the loan proceeds for which they are requesting forgiveness are used, up to the maturity date of the loan, as long as they apply within 10 months after the last day of the covered period. 

If an employer does not follow these rules, they are committing PPP loan fraud to the detriment of taxpayers.

If you suspect your employer has broken any of the PPP loan terms, your best option is to speak with a PPP whistleblower lawyer to determine how to stop them from continuing to defraud the government.

How can whistleblowers help stop PPP fraud?

Whistleblowers are essential for the discovery of paycheck protection program fraud because they have insider information on their employers that the government might not otherwise discover. 

Under the False Claims Act, a whistleblower who suspects PPP fraud can file a qui tam lawsuit on behalf of the government seeking to recover funds misappropriated due to fraudulent business activity. 

To file a qui tam lawsuit, the whistleblower must be represented by a lawyer.

In successful qui tam cases, the government will receive treble damages from the company for paycheck protection program fraud, and the whistleblower receives 15-30% of the government’s recovery.

The False Claims Act also protects whistleblowers from retaliation by their employers.

How can I tell if my employer committed paycheck protection program fraud?

While there are no specific criteria to prove PPP loan fraud occurred, there are red flags that indicate a business might have committed PPP fraud.

  • A business was only recently opened when it applied for the loan. 
  • A sudden spike in payroll numbers.
  • Unverifiable employees on payroll sheets.
  • An employee shows up on more than one payroll account.
  • False or altered bank records, W2s, or 1099s.
  • False records of how the loan proceeds were used. 
  • False documents that make the business look smaller than it actually is.
  • Loan applications for nonexistent or closed businesses. 

If you have seen documents or other evidence indicating PPP loan fraud, your instincts are usually accurate about detecting something suspicious.

You can speak with a lawyer to determine whether you have a viable whistleblower case without your employer knowing. 

Call DiCello Levitt at (877) 659-1294 for a free, confidential consultation today– after all, the longer you wait to report, the less likely you will be to get a reward.

What should I do if I suspect my employer committed PPP fraud?

Because of specific False Claims Act provisions, you should seek a confidential consultation with an experienced whistleblower lawyer.

Under federal law, you can recover significant compensation for blowing the whistle, but only when represented by a lawyer. 

When you hire a PPP fraud lawyer, they will investigate your claim and determine the best course of action to protect you from retaliation and get you maximum compensation.

DiCello Levitt provides whistleblowers with confidential consultations and protects whistleblowers’ identities to the maximum extent possible.

Call DiCello Levitt at (877) 659-1294 for a free, confidential consultation today– after all, the longer you wait to report, the less likely you will be to get a reward.

How much money will I get if I blow the whistle on my employer for paycheck protection program fraud?

PPP loan fraud cases are handled under a federal statute called the False Claims Act.

Under the Act, the government can recover treble (3-times) damages from businesses that file fraudulent documents connected with a PPP loan. 

The False Claims Act provides first to report whistleblowers with 15-30% of the government’s recovery for PPP fraud.

The percentage a whistleblower receives depends on the quality of the information provided, their culpability in the fraudulent activity, and whether the government chooses to intervene and prosecute the lawsuit on its own behalf. 

The total reward a whistleblower will receive depends on how much money the employer fraudulently obtained from the government.

Whistleblower rewards are often substantial because, under the False Claims Act, the government can receive three times the amount of money that was improperly provided to the business. 

Can you anonymously report PPP fraud?

Whistleblowers can report PPP fraud anonymously to the Office of the Inspector General, but those who do will not be eligible for financial compensation under the False Claims Act. 

If you suspect PPP loan fraud, your best option is to speak with a whistleblower attorney to protect you from retaliation and pursue compensation through a qui tam lawsuit.

Anything you tell a lawyer will be held strictly confidential until you file a lawsuit. 

When you file a qui tam lawsuit, instead of reporting directly to the government, you are eligible for 15-30% of the government’s recovery when you are the first to provide information leading to a resolution in the government’s favor. 

Can my employer retaliate against me if I report suspected PPP fraud?

The False Claims Act offers remedies to whistleblowers whose employers retaliate against them.

These remedies include:

  • Back pay, including wages and benefits lost from being unlawfully terminated
  • Reinstatement to their former job
  • Front pay, including wages and benefits to cover the time finding a new job
  • Out-of-pocket costs, including the cost of finding employment
  • Damages for pain and suffering
  • Punitive damages
  • Attorneys fees, and 
  • Court costs

When you hire a whistleblower lawyer to file your claim, the firm can help protect you from retaliation and get you remedies for retaliation that does occur.

DiCello Levitt will do everything in its power to protect you from retaliation and get you the compensation you deserve for protecting taxpayer dollars. 

For more information on the Payback Protection Program FAQ, this article will provide you with a general summary of the government plan.

The Attorneys of DiCello Levitt are Experienced, Exceptional Whistleblower Lawyers That Understand PPP Fraud and Know How to Protect You.

Call DiCello Levitt at (877) 659-1294 for a free, confidential consultation today– after all, the longer you wait to report, the less likely you will be to get a reward.