The First PPP-Related Indictment in Buffalo Has Been Handed Down. The Enforcement Actions Are Just Beginning

Brian M. Feldman, partner and chair of Harter Secrest & Emery’s Government and Internal Investigations practice group, was featured in a recent Buffalo Business First article titled, “The First PPP-Related Indictment in Buffalo Has Been Handed Down. The Enforcement Actions Are Just Beginning.” The article describes the PPP-related federal indictment in Buffalo against Curtis Jordan and Hugo Hurt and their firm, 5 Stems Inc. They are accused of wire and bank fraud conspiracy, bank fraud, and engaging in monetary transactions with criminally derived property. Brian explains that the Paycheck Protection Program (PPP), a federal stimulus measure that offered forgivable loans for qualified businesses that used the cash to support employees and operations, has become a magnet for those willing to engage in forgery and in outright fraud.

Brian, a former Assistant United States Attorney and Senior Litigation Counsel in the United States Attorney’s Office for the Southern District of New York in Manhattan who prosecuted cases related to the 2008 housing crisis said, “enforcement actions related to PPP are likely to take place at several levels, a multi-layered process that will stretch for years. The first level: a wave of criminal prosecutions that has already begun. The 5 Stems case is among at least 233 criminal prosecutions related to the PPP across the U.S., a number that is growing quickly every week.” He continues to describe the second level, “a civil case under the False Claims Act, which is theoretically easier to prove but not expected to be a widely used tool.” And finally, Brian states, “there will be a flood of regulatory cases where the U.S. Small Business Administration decides whether or not to forgive the loans or whether they need to be paid back. It will be the difference of thousands of dollars, at least, and for many applicants will mean much more.” 

Want more information on COVID-19 government enforcement activities?
We have created an online resource to track the government’s enforcement of COVID-19 financial aid programs on our website. The HSE COVID-19 Federal Aid Program page provides insights and perspectives on the entire lifecycle of participation in a COVID-19 financial aid program, including tracking criminal and civil fraud enforcement actions by the U.S. Department of Justice, tracking key judicial decisions on COVID-19 federal aid programs, compiling the core laws, rules and forms governing the PPP and COVID-19-related EIDL program, and more.

To view the article on the Buffalo Business First website, click here.

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