SBA EIDL LOANS & CIVIL & CRIMINAL PENALTIES & BANKRUPTCY FILINGS

 SBA EIDL LOANS & CIVIL & CRIMINAL PENALTIES & BANKRUPTCY FILINGSMany people are contacting us, asking if wrongfully applying for or misusing SBA EIDL funds constitutes a crime or could subject them to civil or criminal penalties. The answer depends on the "facts and circumstances" of each case. The first fact to consider is whether the action was a mistake (negligent) or willful. Negligent actions are not criminal, but willful actions may be. Second, what is the dollar amount involved? Was it a misapplication of $25,000.00, $50,000.00, or $1,000,000.00? The SBA and Department of Justice are busy organizations that tend to focus on larger dollar amounts when pursuing criminal actions.Third, were the involved parties part of a criminal gang or ring with prior criminal actions or convictions or first offenders.Fourth, reported criminal cases often involve situations where loans were obtained with no legitimate business purpose. Instead, the funds were acquired through false representations to the SBA, with the intent to steal from or defraud the government. Consequently, wrongfully applying for or misusing SBA EIDL loans can lead to civil or criminal penalties.The SBA loan documents signed by all borrowers say that whoever wrongfully misapplies  SBA loans shall be civilly liable to the Administrator in an amount equal to one-and-one half times the original principal amount of the loan under 15 U.S.C. 636(b).Second in addition, any false statement or misrepresentation to the SBA may result in criminal, civil or administrative sanctions including, but not limited to: 1) fines, imprisonment or both, under 15 U.S.C. 645, 18 U.S.C. 1001, 18 U.S.C. 1014, 18 U.S.C. 1040, 18 U.S.C. 3571, and any other applicable laws; 2) treble damages and civil penalties under the False Claims Act, 31 U.S.C. 3729; 3) double damages and civil penalties under the Program Fraud Civil Remedies Act, 31 U.S.C. 3802; and 4) suspension and/or debarment from all Federal procurement and non-procurement transactions. Statutory fines may increase if amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015.Third,if one intentionally misuse the funds, it could be considered fraud, wire fraud, money laundering, false statements, or theft of government funds. which are criminal offenses. Fraudulent use of SBA loan proceeds may lead to  fines, penalties, and potentially imprisonment.Fourth, The dischargeability of SBA EIDL loans in Chapter 7 Bankruptcy is governed by bankruptcy law section  11 U.S.C.A. § 523(a)(2)(B). That section  provides for non-dischargeability of debts obtained by false representation or fraud. Clients with questions about defaulted SBA loans and civil or criminal penalties, or discharging those loans in Bankruptcy should contact Jim Shenwick, Esq  [email protected]  917 363 3391Jim Shenwick, Esq  917 363 3391  [email protected] Please click the link to schedule a telephone call with me. https://calendly.com/james-shenwick/15minWe held individuals & businesses with too much debt!