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Government Loan Fraud Lawyers

Government loan fraud is a tempting target for fraudsters, and whistleblowers and government loan fraud lawyers are crucial to the government’s line of defense.

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The U.S. government offers many different loans for dozens of different reasons. You may be most familiar with the Paycheck Protection Program (“PPP”) and EIDL loans that the government offered during the COVID-19 pandemic. The government is a very desirable lender, offering excellent interest rates and access to funds for people and organizations who might not otherwise be able to obtain loans. However, with government loans and government-backed loans, any default means the American taxpayer is left holding the bag.

Government loan fraud is often a violation of the False Claims Act

When a person or business attempts to defraud – or successfully defrauds – the government, it generally violates the False Claims Act. For example, during the COVID-19 pandemic, many individuals submitted false and fraudulent documents for PPP or EIDL loans. Sometimes, this fraud can occur on a small scale, but other times it is systematic and widespread.

Regardless of the type of loan or scale of fraud, it needs to stop. The ultimate burden to pay for it falls on taxpayers. And that’s not fair.

What are the difference between government loans and government-backed loans?

A “government loan” is any loan issued directly from the government. Federal student loans and the recent small business loans triggered by the CARES Act are examples. There is typically no bank involved – except the Federal Reserve Bank. The government is the lender, and the loan recipient is the borrower.

A “government-backed loan” is more common and is a way the government induces banks to lend money by promising to pay if the borrower defaults. Essentially, the government is co-signing the loan with the borrower to get the bank to turn the money loose. This kind of loan may include collateral, like mortgages, or may have no collateral, like disaster relief loans.

Loan types and government loan fraud

Government loan programs generally fall into six classifications. Each of these classifications covers several loan programs, any of which fraudsters can exploit.

Agricultural Fraud

Business Fraud

Education Fraud

Housing Fraud

Loan Repayment Fraud

Veterans Fraud

Agricultural loans and government loan fraud

The Department of Agriculture, among others, offers several different lending programs covering everything from farm operating costs to fisheries to storage facilities. That may conjure an image of the American family farm and people working the land, but remember that there are also enormous, industrial-scale farms run by companies. As such, the possibility of large-scale fraud absolutely exists.

Business loans and government loan fraud

The Small Business Administration operates several different loan programs. It administers a few that have entered the mainstream lexicon, like the PPP loans created by the CARES Act. The government has only recently begun to pursue the apparently widespread fraud perpetrated through that program. The Department of the Interior, USDA, and the Department of Commerce also have loan programs. Disaster relief loans can also fall under this category. The wide variety of programs and impossibility of strict oversight make these loans popular targets of fraud.

Example Case: A Virginia staffing firm agreed to settle a whistleblower case alleging they fraudulently used PPP funds.3

college-students-walking-on-campus-300x234Education loans and government loan fraud

For many Americans, an education loan equates to a federal student loan, like a Stafford Loan, Perkins Loan, or PLUS Loan. Those are typical examples, but there are many more. Some education loans are made to institutions and not students. Therefore, educational institutions—including for-profit institutions—may have access to funding that other types of businesses don’t.

Example Case: In 2016, a university agreed to pay several million to resolve a whistleblower’s allegations that it violated the False Claims Act in connection with a federal grant and with regard to receiving and disbursing Title IV federal student aid funds.3

Housing loans and government loan fraud

Basically, every residential mortgage is a government loan or a government-backed loan. There are also commercial loans as well. Most Americans remember the mortgage loan crisis of the late 2000s that sent the global economy into a dive. Mortgage and banking fraud have been correlated in the mind of consumers ever since.

Loan repayment programs and government loan fraud

The government can lend money in return for interest paid on the loan or lend money in return for services rendered as a result. One example is an education loan that converts to a grant if the borrower spends a designated amount of time in a certain area or on a particular task. This also applies to things like clinical research. These kinds of loans are susceptible to more commonly understood forms of fraud like education loan fraud, healthcare fraud, and more.

us-military-veteran-300x234Veterans’ loans and government loan fraud

Veterans’ loan programs also cross over to several types of possible fraud. Veterans can receive access to advantaged loans for housing, education, and healthcare as a benefit of their service. Veterans may also benefit from development programs that offer loans to veteran-owned businesses. Certain types of loans, such as Veterans Life Insurance Policy Loans, can even cross over into possible insurance fraud.

Example Case: A large construction company allegedly set up “sham” small companies and veteran-owned businesses to win large multi-million dollar military construction contracts. The DOD often requires that large contractors use small- and minority-owned businesses as sub-contractors on DOD jobs, in efforts to help them compete on these massive lucrative bids. The large construction company and its sham companies made hundreds of millions of dollars allegedly fooling the government for several years. A whistleblower, who was employed on one of these large construction jobs, became aware of this scheme and blew the whistle.3

Government loan fraud, multinational corporations, and foreign aid

With the dollar being the benchmark currency of the global economy, it stands to reason that the U.S. government can act as a global lender. Many millions are loaned to international and multinational corporations and foreign governments every year.

If these borrowers or recipients obtain money through deception or fraud, the False Claims Act could be implicated. These types of cases are incredibly complicated – things like jurisdiction and international law come into play. If you are aware of or have proof of fraud at this level, contact a government loan fraud lawyer immediately.

Talk to a whistleblower attorney now

A whistleblower lawyer can help you act now to try to stop fraud. Plus, we can help guard your best interests and possible reward if the case is successful.

Make a confidential, no-obligation call to 1-888-292-8852 or contact us securely online. Our attorneys have vast experience helping whistleblowers. And we guarantee that you will not pay us anything unless we successfully collect on your behalf.2 You get the benefit of our experience and resources at zero upfront cost.

Awards we’ve won

For standards of inclusion for awards listed, visit bestlawyers.com, thenationaltriallawyers.org, superlawyers.com, farrin.com/business-nc-power-list, and millondollaradvocates.com. National Trial Lawyers Top 100 designation is for 2022. Regarding the Million Dollar Advocates Forum, we do not represent that similar results will be achieved in your case. Each case is different and must be evaluated separately. Firm award is for the Law Offices of James Scott Farrin. Attorney awards are for attorneys with the Law Offices of James Scott Farrin.

Contact the Carolina
Whistleblower Attorneys

If you’re wondering if it’s a good idea to speak with a whistleblower lawyer about what you know, let us set the record straight.

  • Corporate ethics hotlines can be risky and may lead to termination. If you’ve already done this, call us immediately.
  • Your coworkers could be aware of the fraud – or complicit in it – and you should not talk to them about it.
  • The first claim to be filed under the False Claims Act can proceed – if you’re not first, you’re at a serious disadvantage and may get nothing (another reason not to speak to your coworkers about it).
  • A confidential discussion costs you a few minutes, but could save you time, stress, and money.

1-888-292-8852

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