The current COVID-19 coronavirus pandemic has certainly taken a toll on businesses nationwide. The stay-at-home orders across the country have left restaurants empty and businesses with their doors shuttered. In an attempt to help these businesses, Congresses created the Paycheck Protection Program (PPP) to provide loans in March. Companies can apply for PPP loans and have the loan fully forgiven if the funds are used to cover payroll expenses or rent and utilities.

Recently, two businessmen were charged with committing fraud after they applied for PPP loans for fake entities. According to USA Today, David A. Staveley, 52, and David Butziger, 51, both from the New England area, attempted to obtain over $500,000 in PPP loans for businesses that did not exist prior to the COVID-19 pandemic or businesses the pair did not own. Federal prosecutors stated that the men “claimed to have dozens of employees earning wages at four different entities when, in fact, there were no employees working for any of the businesses.” They discussed their plans to seek the fraudulent loans over email, and then actually applied for the loans. While this is the first situation in which criminal charges have actually been filed, federal investigators stated they are already looking into several other reports of similar PPP loan fraud.

Staveley and Butziger are now facing federal charges of conspiracy to make false statements, conspiracy to commit bank fraud, and aggravated identity theft. It is important to understand these federal charges and that they can result in severe consequences.

• Conspiracy: Conspiracy (18 U.S.C. § 371) occurs when two or more people conspire, or agree, to commit a crime and then do an act to further the conspiracy. When you are convicted of conspiracy, you are often sentenced based on the underlying crime and can face the same consequences you would face if you had actually committed the crime. In this case, that means facing the consequences for making false statements and bank fraud.

• Under federal law, Making False Statements is a very broad crime that essentially prohibits lying in any form to the government. This crime can result in up to 5 years in prison.
• Bank Fraud, which is defined as obtaining money or other assets from a financial institution through fraudulent means, has severe penalties that can include up to $1,000,000 in fines and up to 30 years in jail depending on the extent of the fraud.

• Aggravated identity theft:  Aggravated identity theft occurs when a person uses the identity of another during the commission of a crime. This crime can result in a two year prison sentence.

Each of these crimes is a serious federal crime, and if convicted, can lead to life-altering consequences. If you have been accused of a conspiracy or identity theft crime or any other federal crime, you should contact an experienced federal criminal defense attorney as soon as possible. There are defenses available and the knowledgeable attorneys at the Kann California Law Group can evaluate your case and determine the best defense strategies available. We have years of experience handling defenses for California state charges as well as federal charges. We can discuss your situation and answer your questions during a free case consultation, so call us today at 888-744-7730 or click through to our contact form and one of our attorneys will call you right away.