Trucking company caught in PPP fraud
A local trucking company in Michigan was caught falsifying documents to get a second PPP loan. They are being fined $1 million plus restitution of the nearly $250,000 loan and up to five years in the pokey. It all adds up to very bad news for them. I know the people involved, so I won’t name names but you have Google too.
What did they do?
From what I understand, company officials applied for and asked forgiveness for a second PPP loan claiming that the company’s revenue had been reduced 25% to qualify. The company then submitted false payroll tax returns as part of the forgiveness application and signed it. That last sentence is what brings trouble to the company’s doorstep. But how did the feds figure it out?
How they got caught
From the things I heard (and it’s all second-hand), a former employee knew of the fraud and went through whistleblower protection and notified the government. This makes sense to me because part of the $1 million fine is the whistleblower compensation. The U.S. Department of Justice said so on its website. Once the feds got wind of it and compared the PPP payroll tax returns to IRS records, it was probably pretty quick.
What’s the lesson in this???
If you didn’t get a PPP loan under false documents you might think this is an episode of “Law and Order: PPP” or something similar. But, there is a larger lesson in this for all trucking companies. That lesson is this: “Trucking company owners are caught when a disgruntled former employee blows the whistle. ” In this case it was PPP. Has your company ever had a DOT audit pop up shortly after a disgruntled driver quits? Possibly…
So with that in mind, if you are paying 1099s and you should be paying W-2s, what will happen when you have an unhappy employee? Expect a call from the IRS or your state tax department. The government entities are stepping up enforcement on employment misclassification. What is happening to the owners in this case could be heading your way. Or maybe you’ll be the subject of a DOT audit as I mentioned earlier. Or something else. Remember, there are no secrets if someone is upset with you. Don’t put yourself in jeopardy.
