HomeInvestigating Federal Civil False Claims Act Issues In Connection With SBA Loan Default

Investigating Federal Civil False Claims Act Issues In Connection With SBA Loan Default

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Are you wrestling with SBA Loan Default hassles? We can lend a hand!

Ever feel like you’re treading water with an SBA debt problem? It’s tough, right? Trying to settle SBA debt single-handedly can seem almost impossible. But don’t despair! Lawscape and the Lawscape are here to help. Our team specializes in SBA OIC claims and we’re committed to helping you navigate the whirlpool of SBA loan default. We do this by using our sharp legal minds to dissect your case under the guidelines and fine details of the Federal Civil False Claims Act.

Cracking the Code: The Federal False Claims Act and SBA Loan Default – What are the links?

Did you know that the False Claims Act (FCA), covered in 31 U.S.C. Sections 3729-3733, can be harnessed as a powerful tool against SBA loan fraud? Not only that, it can also combat fraud related to other government-funded schemes. Particularly noteworthy is the whistleblower provisions (Section 3730), which have turned out to be a game-changer, particularly in the healthcare domain.

These provisions, alongside the Civil Investigative Demands (CIDs) that the Department of Justice(DOJ) uses to obtain crucial documentation and testimonies, have transformed the compliance landscape. So, if you’ve got a role in compliance planning, you really need to get to grips with the intricacies of the FCA.

Section 3729 – Unmasking the FCA’s “False Claims”

How does the FCA define false claims and what does it entail? Put on your legal lens and let’s zoom into Section 3729, the heart of the FCA. This section shapes up the false claims liability, establishes the Act’s requirement for knowledge or “scienter”, delineates “claims”, and includes a voluntary disclosure provision.

A. Liability

The Act stipulates that anyone who knowingly commits fraudulent actions against the U.S. (including making false declarations or using false certificates to secure a fraudulent claim for payment or approval, or conspiring to defraud the government through fraudulent claims) is liable for triple damages and a penalty of $5,000-$10,000 per false claim filed. However, if the individual satisfies the “volunteer” provisions of the Act, the penalties could potentially be reduced to at least double the damages (Section 3729(a)(7)(A)-(C)).

Section 3729(a)(7) – Demystifying the “Reverse False Claim”

While there are four key types of false claims that the FCA aims to prevent, one that I’d like to highlight is the “reverse false claim” under Section 3729(a)(7). Its main focus is to deal with instances where either an individual or an entity has already pocketed funds from the government that ought to be returned. It shares some striking similarities to a restitution action or a claw back action during bankruptcy.

For instance, in an SBA context, let’s imagine a lender, through a series of false claims or fraudulent certifications, gets payment on the SBA guarantee and hands over the rights to collect from the defaulted SBA borrower to the SBA. If it turns out that this payment was based on bogus presentations by the lender during submission, this FCA provision could potentially be invoked to get back the paid SBA guarantee on the SBA loan default, as well as provide compensation to the victims (like the SBA borrower

Lawscape Can Help You Manage Your Business Debt

If you’re struggling with business debt, we can help you understand your situation. During the initial consultation, we’ll go over the contract, and other legal documents you signed. After that, our firm will work with you to get a better understanding of your situation, and help you come up with a game plan that keeps your business alive. 

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Everyone has different types of business debt. What matters is that you take it seriously. Regardless of whether it’s secured, or unsecured, you need to work with a firm that understands how to negotiate, reduce, settle, and manage, this business debt. 

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