For Palm Beach County business owners who received financial assistance through an SBA-backed loan program, learning what an SBA OIG investigation means for Palm Beach County business owners is crucial. Over the past several years, the Office of Inspector General (OIG) has stepped up efforts to detect possible fraud relating to the Paycheck Protection Program (PPP), Economic Injury Disaster Loans (EIDL), and other federal business relief programs.
Why Choose The Kirlew Law Firm?
The team at The Kirlew Law Firm has extensive experience in litigating federal criminal cases. We understand the legal issues and SBA loan fraud penalties that are encountered during federal investigations. Whether you need help with subpoenas and target letters or representation during interviews and court appearances, we can protect your rights throughout the investigative process.
What Is the SBA Office of Inspector General?
The SBA OIG is tasked with conducting oversight of SBA programs. When federal funds have been allegedly obtained fraudulently or used improperly, the agency typically launches an audit, review, or criminal investigation. This branch of the SBA focuses on uncovering instances of fraud, waste, abuse, and misconduct tied to agency programs.
In addition to conducting independent investigations, the SBA OIG allocated additional resources to identify fraudulent pandemic relief funding. The agency also collaborates with law enforcement partners, such as the FBI, DOJ, IRS Criminal Investigation Division, and more, during certain investigations.
Why an SBA OIG Investigation May Begin
An investigation can occur for a variety of reasons. Federal agencies may discover discrepancies in information provided on a loan application or other important related documents. Sometimes, federal investigators flag loan applications for a closer look after spotting unusual trends in their data analysis. Discrepancies in revenue figures, employee numbers, ownership details, and how money was actually spent are common reasons why an investigation might begin.
Knowing the right steps to take when you receive a subpoena can make a significant difference in how your case develops. Business owners are not typically aware of an investigation until they are contacted by federal agents or receive a subpoena or request for information. By the time an owner is notified, investigators may already have significant evidence against them.
Keep in mind that an investigation does not necessarily mean that a crime was committed. In many cases, investigators may try to gather information to see whether allegations have merit.
SBA Loan Fraud Laws That May Apply
Paycheck Protection Program (PPP) loan fraud is among the most well-known examples of loan fraud. The U.S. SBA announced that it has submitted to the U.S. Department of the Treasury 562,000 alleged fraudulent loans for collection, making this the largest referral package the SBA has ever received. These borrowers are linked to $22.2 billion in PPP and COVID Economic Injury Disaster (EIDL) loans that were previously reported as potentially fraudulent.
While many federal statutes can be involved in an SBA investigation, some of the more common laws include:
- 18 U. S.C. § 1001. This statute makes it unlawful to knowingly make false statements or conceal information related to the federal government.
- 18 U. S.C. § 1014. This federal law pertains to false statements made to influence lending activity related to financial institutions insured by the federal government.
In some cases, prosecutors may investigate allegations related to wire fraud, bank fraud, conspiracy, money laundering, and theft of government funds. Potential charges vary based on the facts of each case. If your case moves forward, knowing what to expect during federal court proceedings can help reduce some of the anxiety.
Why Business Owners Hire an SBA Loan Fraud Lawyer
Some owners choose to hire an SBA loan fraud lawyer because SBA investigations can become more complicated as investigators request additional records and interview witnesses. A West Palm Beach SBA loan fraud attorney can:
- Identify weaknesses in the government’s case.
- Determine if prosecutors can prove that you had criminal intent.
- Represent you during federal court proceedings should charges be filed.
If your business is located near downtown West Palm Beach, around Okeechobee Boulevard, near Palm Beach Lakes Blvd., or in one of the many areas connected by Interstate 95 and Florida’s Turnpike, a West Palm Beach SBA OIG investigation can impact your organization. Federal proceedings are typically held at the Paul G. Rogers Federal Building and U.S. Courthouse, located at 701 Clematis Street, West Palm Beach, FL 33401.
FAQs
Can an SBA OIG Investigation Affect My Ability to Sell My Business?
Yes, an SBA OIG investigation may affect your ability to sell your business. An investigation won’t necessarily bar you from selling your business, but it could cause issues when your potential buyer conducts their due diligence. When a business is for sale, buyers typically want to understand any active civil claims, government inquiries, and financial risks beforehand.
Can an SBA OIG Investigation Involve Businesses That Never Received PPP Loans?
Yes, an SBA OIG investigation can involve businesses that never received PPP loans. The SBA offers and guarantees many loans and types of assistance beyond the PPP. An SBA OIG investigation could include Economic Disaster Loans, traditional SBA loans, grants, or other types of federal assistance. Essentially, if your business took part in any SBA program, it could be investigated if they find issues with eligibility, supporting documents, or use of funds.
May My Bank Be Notified If I Am Under an SBA OIG Investigation?
Occasionally, investigators may acquire records directly from banks during their investigation. Investigators may subpoena banks or issue other legal requests for documentation. Investigators do not have to inform a business owner that they may be looking for particular records. The bank’s knowledge of the investigation depends on the type of information being requested.
Does an SBA OIG Investigation Become Public Information?
No, an SBA OIG investigation does not always become public information. Investigations are often conducted privately. If charges are brought, then some of the court records and proceedings may be available to the public. Additionally, high-profile cases may be reported on by the media. Whether anyone else finds out about the investigation often hinges on whether the investigation leads to an arrest.
Connect With The Kirlew Law Firm Today
An investigation by the SBA OIG can be a very unsettling experience for business owners in Palm Beach County. Just because you are being investigated, it doesn’t necessarily mean that you will be charged with a crime. However, it does mean that the FBI and other federal agencies are scrutinizing your business records and loan documents. The Kirlew Law Firm can help. Contact us today to discuss your situation.
