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Post By: Adam Turteltaub
The Paycheck Protection Program (PPP) stimulus effort has led to many publicized cases of fraud. As Neil Getnick, managing partner at the law firm Getnick & Getnick explains in this podcast, it’s not just grifters who are taking advantage of this program. Legitimate businesses can find themselves on the wrong side of the line.
As organizations sought funds many engaged in outright fraudulent activity such as creating fictitious employees, applying despite being on the Treasury Department’s do not pay list, even hiding the fact that they were in bankruptcy.
But there are subtler ways companies can go astray. A technically accurate but misleading answer in the questionnaire is one trap. Another is questionable documentation. There are very specific document requirements, he explains, and if an organization makes a redaction it must be spelled out quite clearly.
But perhaps most importantly organizations need to ensure that their attestation to this sentence is truthful: “Current economic uncertainty makes this loan request necessary to support the ongoing operations of the applicant.”
With a new stimulus being discussed in Washington, organizations need to ensure that any funds are applied for properly. And if they err in doing so, they need to be very careful in how they correct the matter.