CARES Act Increases Oversight and Criminal Investigations

The CARES Act will infuse more than $2 trillion into the U.S. economy — the largest such action in history. But if history is any guide, wherever there is a big pot of money, some people will look to steal it. Some desperate individuals might misrepresent their eligibility for unemployment benefits. Others will try to defraud government agencies like the Small Business Administration, banks, and non-bank lenders through various misrepresentations about eligibility for relief. Still others, realizing that they or their companies have cut corners, will make false certifications to the Department of the Treasury, the SBA, or other government agencies.

In the corporate world, this will affect eligible small, medium, and large companies and their executives, who will have to balance the difficult task of keeping their businesses afloat while striving to ensure that their employees stay clear of activity that might lead to a criminal investigation. It will also affect the influx of additional lenders who will, for the first time, be allowed to make federally guaranteed loans under section 7(a) of the Small Business Act.

Originally published in Bloomberg Law; reprinted with permission.