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Borrower Beware: Defending PPP Loans from After-the-Fact Government Scrutiny


Created on September 28, 2020





The Paycheck Protection Program (PPP) was a lifeline to many companies faced with the existential threat of an unknown pandemic. But the prospect of "free money" by loan forgiveness comes with ever-evolving strings – including the possibility of an audit and scrutiny by federal agencies with the jurisdiction and political will to investigate borrowers' eligibility and use of funds.

In this program, Hodgson Russ attorneys Jason Markel, Reena Dutta, and Ben Zuffranieri, Jr. will discuss PPP risks and strategies you can implement now to prepare to protect yourself or your company against the inevitable scrutiny, litigation, and potential criminal investigations that some borrowers may soon face. 

Learning Objectives:

  1. Review the implications to borrowers of after-the-fact changes to the PPP
  2. Assess how hindsight determinations of borrower ineligibility or misuse of funds can lead to loss of forgiveness and personal liability
  3. Adequately plan before submitting a forgiveness application
  4. Identify the risks and consequences to borrowers of SBA loan reviews and audits
  5. Discuss whether the SBA's appeal process may be stacked against borrowers
  6. Describe critically considerations surrounding the "necessity certification" and interpreting its meaning and import
  7. Manage uncertainties surrounding how the SBA and government will enforce and audit loans
  8. Comply with recommendations for documenting the impacts of the pandemic on your business
  9. Evaluate potential borrower and individual criminal liabilities under the False Claims Act and other statutes
  10. Analyze criminal enforcement parallels and comparisons to the Troubled Asset Relief Program (TARP)
  11. Avoid potential criminal liability under the PPP Program
  12. Collect and preserve essential documents and evidence now
  13. Accurately certify borrowers on the loan application and forgiveness application
  14. Strategize to protect borrowers from governmental scrutiny 

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