Financial Advisor obtaining a PPP Loan

[OldShooter]

@ExFlyBoy5, interesting story. It has always made me smile a little bit when I read about politicians' bashing an agency for being slow and, subsequently, bashing them for making mistakes.

But your story is really IMO an answer to a different question: "If the OP reports this suspected fraud, will anyone do anything about it?" Hard to say, but the answer may well be "Probably not."

But a minority in the thread, including me, think that if the OP has reasonable evidence that the FA filed a fraudulent application the he/she has a civic obligation to report this -- regardless of whether anything will result; that is not the OP's call.

The same thing would be true if the OP had evidence and believed that the FA was financially abusing an elderly client. The only difference between the two scenarios is that PPP fraud abuses all taxpayers, not just one person.

 

[ExFlyBoy5]

@ExFlyBoy5, interesting story. It has always made me smile a little bit when I read about politicians' bashing an agency for being slow and, subsequently, bashing them for making mistakes.

But your story is really IMO an answer to a different question: "If the OP reports this suspected fraud, will anyone do anything about it?" Hard to say, but the answer may well be "Probably not."

But a minority in the thread, including me, think that if the OP has reasonable evidence that the FA filed a fraudulent application the he/she has a civic obligation to report this -- regardless of whether anything will result; that is not the OP's call.

The same thing would be true if the OP had evidence and believed that the FA was financially abusing an elderly client. The only difference between the two scenarios is that PPP fraud abuses all taxpayers, not just one person.

I honestly couldn't answer as to what happened once a file was flagged. We had specific directions if we noticed an irregularity and flag it and then move on.

I do know that there were/are investigations but if I were to guess it was either connecting several of these bogus claims to one actor or to the most egregious offenders. I also know there was/is a specific group that dealt exclusively with some of the banks that submitted applications and met a certain threshold of flagged applications. I recall seeing a bulleting from the SBA that highlighted some of the findings, but that short period of my life (ah...COVID, not much going on....I can help out @ the SBA for a bit) wasn't very enjoyable, so I have blocked much of it out.

I think it is reasonable to ask the FA if they might explain what appears to be an "irregularity." I have glanced at the ProPublica database and I don't know that I would trust the reporting (actually, the data they are getting) 100%. My FIL/MIL did an PPP loan and they mentioned that something on that report (or a similar one) didn't quite line up with the actual loan. But again, I don't know specifically what was erroneous.

Another venue for the OP (if they REALLY think there was fraud committed) could be reporting that to the licensing entity of that advisor. However, my I don't know much about that *either* (see a trend?!?)

Edit: Here is a list of some of the fraud investigations that have occurred and some of the fraudulent loans were for a pretty small amount (all things considered).

 

[tb001]

I question how on earth the OP could have ANY idea that fraud has been committed unless they have some sort of special secret knowledge about how the FA’s company is structured or know the inner workings of their finances. That’s what the checks already in place in order to qualify for the loans are for. It’s nuts to me. If the OP wants to move their money for whatever reason, ok. But to be considering reporting the business for PPP fraud on the basis of an employee count or their assumption about business metrics/financials is nuts.

 

[Sunset]

.......

Edit: Here is a list of some of the fraud investigations that have occurred and some of the fraudulent loans were for a pretty small amount (all things considered).

There are a bunch of multi-million dollar fraud applications, and a few "small" ones of under $100K.

Penalties seem about the same, so I guess the rule is go BIG or go home...

 

[ncbill]

No kidding...saw I business which I know is going gangbusters because of COVID get a PPP loan of nearly a million bucks...already forgiven of course.

 

[Letj]

OP has presented no good evidence any wrongdoing occurred. The details of the financial advisor's PPP loan application are about as much OP's business as my personal tax returns are to my housekeeper. IMO some of the overreaching and judgement in this thread borders on bizarre.

Agree. I am kind of astonished that people appoint themselves “integrity police” without knowing any details. It’s like character assassination. I see that in the media a lot.

 

[Letj]

Getting a PPP loan was very easy to obtain and if a business didn’t apply, I would venture to say that wasn’t very smart. A lot of large companies, who didn’t need the loan and certainly didn’t have any economic damage from covid applied and got big bucks. The money went straight to the bottom line and was pocketed by the owners or given as big bonuses. Do we report them or should we as tax payers demand our money back?

 

[Scratchy]

Agree. I am kind of astonished that people appoint themselves “integrity police” without knowing any details. It’s like character assassination. I see that in the media a lot.

Yes, and I'm also surprised that many here suggest asking the advisor about the loan. No matter how the question was asked, it would be transparent that you think they might have committed a crime and want them to confirm or deny it, likely with the intent of causing enormous trouble for them. At the least, it's insulting and intrusive. If I were on the receiving end I would not dignify the question with an answer and that gush of air you felt would be me opening the door to invite you to leave.

 

[Librarian]

For me this is simple.
I would immediately drop my FA.
NO WAY would I invest with someone who acquired a PPP fraudulently.
It is stunning to me how many people here say "It's not my businesss"
It IS your business--those PPP's were OUR tax $.
I admit the government did a rotten job of making sure fraud did NOT occur. My BIL got one & said he wouldn't get one again--frankly there were too many unknowns.
AND the fact that the conditions for acquiring a loan made it SIMPLE to get one w/o fraud...well, I prefer to invest my $ with someone with more integrity.

 

[rrppve]

Think fraud is an extremely strong word to use here.
The loan could very well have been completely legitimate or the FA may have well thought it complied with the complex PPP rules. You didn’t have to suffer a loss, your business only needed to have reduced revenue. Virtually every small business I know qualified for at least one PPP loan.
PPP was a way to pump money into the economy through small businesses to minimize the Covid recession impact. People with small businesses got PPP loans, individuals got stimulus payments. That’s how the government injected money into the economy.

 

[ERhoosier]

My rule on dishonesty in a situation like this is one strike and you're out. [/URL]

Agree 100%.

Honesty of character is not a 'sometimes' thing.
Ethical and legally permissible are not the same.

 

[OldShooter]

Think fraud is an extremely strong word to use here. ...

Well, the OP only indicated that he suspected fraud. As I previously said, IMO before he takes any action he should gather more information (including a potentially futile discussion with the FA). He may decide his suspicion was unfounded or he may become more certain that the FA's actions are seriously suspicious. Then and only then I believe he has a civic duty to report it.

I would say that the standard of evidence for dropping the FA is lower than a standard that would support contacting the authorities.

 

[All Is Lost]

Agree. I am kind of astonished that people appoint themselves “integrity police” without knowing any details. It’s like character assassination. I see that in the media a lot.

I never once said I was the ""integrity police." All I did was post a question for guidance. I did not realize how vindictive some of the members on this forum can be.

FYI-I know for a fact the EXACT number of employees that work at this company and it sure as heck is not the number listed on the loan.

 

[ERD50]

I never once said I was the ""integrity police." All I did was post a question for guidance. I did not realize how vindictive some of the members on this forum can be.

FYI-I know for a fact the EXACT number of employees that work at this company and it sure as heck is not the number listed on the loan.

You never communicated this as a fact, and that's what drove a lot of the questions.

You did say "This is a very small office with a total of 4 employees. I have been told by the owner that it is just the 4 of them."

Maybe he meant 4 in the office? Maybe he has more on the payroll outside? Maybe he thought it was none of your business, and just mentioned the 4 that you see?

So OK, if you know for a FACT that he falsified the application, report him and move on. IMO, you have a responsibility to report it, if you know it as a fact. Even a strong suspicion, you could report and let the powers that be decide. But I would not assume guilty until proven innocent.

-ERD50

 

[Scratchy]

I never once said I was the ""integrity police." All I did was post a question for guidance.

In fairness you did more than that. You also said:

What bothers me is the fact that my FA needs a loan, when on the surface it appears they don't.

and you said:

After researching more about this PPP stuff, it amazes me how many businesses get this "free Money" when in fact it appears they don't need it.

This does raise questions of propriety and integrity and suggests your motivations here lie with the fact it bothers you that the FA got the loan, independent of any question of fraud.

Also, we should acknowledge the elephant in the room that you said:

Please know that I did not actively seek out to see if she had taken out a loan.

But then you provided the forum with a link to search for PPP loans!!

 

[ERD50]

In fairness you did more than that. You also said:

...

Also, we should acknowledge the elephant in the room that you said:

Quote:
Originally Posted by All Is Lost View Post
Please know that I did not actively seek out to see if she had taken out a loan.

But then you provided the forum with a link to search for PPP loans!!

Which has me wondering, how would one in-actively find out how many employees were claimed?

OK ,in the OP:

In looking at the details of the loan, the number of employees she listed does not match the actual number of employees that work there.

So OP did not "actively seek out to see if she had taken out a loan.", but I guess OP did actively seek out the details of the loan? Is there a distinction there?

-ERD50

 

[Aerides]

Far too many pots and kettles in this thread.

All the bickering, rudeness, and arguing in this thread, by multiple members, is in violation of community rules, unwelcoming, unfriendly, and the sort of posts that discourage more reasonable voices from participating in threads.

Knock it off.