The Small Business Administration (“SBA”) is a division of the U.S. Government aimed at helping small businesses. It backs small business loans that enable business owners to obtain financing at a low-interest rate. The SBA ordinarily requires more financial information versus a standard bank loan.
Providing false information in an application, or fabricating financial information to a federally funded institution, is a federal crime. In fact, depending on the circumstances, a person submitting false information to a bank, for instance, could face a host of federal charges and find themselves facing a substantial amount of prison time.
For example, e-mailing false financial information to a bank raises a number of charges. The government would charge someone with wire fraud since the suspect used their e-mail account to facilitate fraud on a lending institution. Additionally, the government would charge the suspect with a violation of 18 U.S.C. § 1014 – false statement to a financial institution, and 18 U.S.C. § 1344 – Bank Fraud.
The penalties for wire fraud against a financial institution carry up to 30 years in federal prison with a fine of up to $1,000,000. The same punishment applies to bank fraud.
Therefore, even a small innocuous lie in an application can be devastating to your future. But this situation usually comes up when someone misuses the bank loan funds. Moreover, a borrower will claim the money will be used for marketing or for business inventory. But the borrower will actually use the funds for personal expenses or vacations. In that instance, the government would claim that the bank was defrauded since the borrower lied about how the funds would be used when they initially applied for financing.
Recently, the FBI has found itself inundated with PPP Loan fraud investigations. The same rules and charges apply to obtaining a PPP loan.
Overall, bank institutions rely heavily on the word of the borrower. This is because banks do not expect someone to lie in light of the harsh criminal penalties that follow.
If you have been arrested or charged with a federal crime, then contact us today. Speaking with federal investigators can cause irreparable harm to your case and future. Give us a call to schedule a free consultation with a federal criminal defense attorney.