AEL Gets SBA Loan Fraud Case Dismissed

August 30, 2022 - David M. Eskew

In May 2022, AEL won another dismissal of criminal charges filed against one of its clients, this time of state criminal charges filed by the State of New Jersey (Hudson County). The criminal complaint, filed in January 2022, levied felony charges against the client for allegedly misappropriating approximately $150,000 in SBA loan funds provided in response to the COVID-19 pandemic, including funds from the federal Paycheck Protection Program (PPP) and the SBA’s Economic Injury Disaster Loan (EIDL) program. AEL confronted the charges directly, providing evidence, records and information to the Hudson County Prosecutor’s Office that the client had properly applied, was eligible for, and used the funds in compliance with SBA’s rules and regulations. On May 16, 2022, the State dismissed all charges filed against the client. Both the client and his AEL family are thrilled with the result. This case was handled by AEL partner David M. Eskew.

Since the inception of federal loan programs to aid businesses and employers in the wake of the COVID-pandemic, the Government has warned would-be fraudsters that robust enforcement action was forthcoming. Indeed, a recent NY Times article indicated that the Government had at least “500 people working on pandemic-fraud cases,” not including investigators from the FBI, U.S. Secret Service, the U.S. Postal Inspection Service, and the IRS. The article also indicated that the federal government had already charged some 1,500 individuals with pandemic-aid fraud and that there were tens of thousands of ongoing and open investigations. President Biden recently signed a bill extending the statute of limitations for pandemic-aid fraud to ten years to permit the Government additional time to investigate and prosecute pandemic loan fraud. Needless to say, the wave of government enforcement action related to COVID-19 pandemic loan fraud has only just begun to rise and has not nearly crested.

AEL has and is representing clients in both federal and state investigations relating to both alleged pandemic loan fraud and other alleged fraud relating to federal programs. This incredible result, and others that we have obtained in both charged and uncharged cases, highlights AEL’s expertise in government programs generally, including the Medicare, Medicaid, and Tricare programs, the PPP, SBA loan programs, and fraud in connection with Service-Disabled Veteran-Owned Businesses (SDVOB). In obtaining the dismissal above, AEL employed its signature evidence-based approach to confront the charges head on and bring about the best possible resolution as efficiently as possible.