Chilivis Grubman attorneys have discussed the CARES Act and the government’s enforcement efforts related to abuses of the CARES Act. The CARES Act remains significant legislation designed to provide through various programs and funding, relief to businesses and individuals harmed by the COVID-19 pandemic.
CG attorneys have often discussed the Paycheck Protection Program (PPP), which was designed to help small businesses pay their employees and meet expenses during the COVID-19 pandemic. Another CARES Act program is the Economic Injury Disaster Loan (EIDL) program. The EIDL is a federal loan initiative that can provide financial help to small businesses or private, non-profit organizations that suffer substantial economic injury because of the declared disaster. The EIDL is significant because it is the only form of SBA assistance not limited to small businesses. Enforcement actions related to PPP and EIDL fraud have steadily become more common. Less commonly discussed are various COVID-19 relief programs and initiatives offered by State entities, such as unemployment relief.
Since the inception of these various COVID-19 relief programs, the federal government has warned the public it will act against individuals and businesses that defraud the programs. CG attorneys have written extensively about these enforcement actions, particularly involving PPP and EIDL fraud, that have involved individuals and businesses across the country, including NFL players and Reality TV stars.
The government’s enforcement efforts continue – and will continue. In a recent announcement, the U.S. Department of Justice announced that Russell Lester, a Colorado man, pled guilty to wire fraud for filing false applications to obtain COVID-19 relief funds. According to the press release, Mr. Lester made false statements to obtain EIDLs and PPP loans. He also received unemployment funds from the Colorado Department of Labor and Employment after making false statements that he was unemployed or did not receive money from an employer due to the pandemic. Based on the false statements and applications, Mr. Lester received EIDLs for $217,400 and grants from EIDL programs for $16,000. He also received $317,975 from multiple PPP loan applications. He allegedly sought over $297,000 in a third PPP loan application that was not funded. From Colorado, he received over $17,000 in pandemic unemployment benefits. Overall, the government alleges that Mr. Lester received over $550,000 from the pandemic relief programs and initiatives because of his false statements between March 2020 and August 2020. The government also noted that Mr. Lester spent some of the proceeds on non-eligible expenses. Mr. Lester is scheduled to be sentenced in February 2023 for his actions resulting in the guilty plea for one count of wire fraud.
The attorneys at Chilivis Grubman represent clients of all types and sizes in connection with white-collar criminal investigations. If you need assistance with such a matter, please contact us today.