The business fraud attorneys at Tauler Smith LLP recently filed a lawsuit against Chase Bank for PPP loan fraud. The civil suit alleges that JPMorgan Chase committed fraud by helping its rich clients at the expense of small business owner clients. Paycheck Protection Program (PPP) loan funds made available in response to the coronavirus pandemic were supposed to be distributed on a “first come, first served” basis. But that’s not what happened. Instead, Chase Bank gave preferential treatment to their larger clients, while making misrepresentations to small businesses that ultimately resulted in loans being delayed and denied when the funds ran out. Tauler Smith LLP is representing the plaintiff in this case, as well as other small businesses who were denied PPP loans.
To learn more about the PPP fraud lawsuit filed against Chase Bank, keep reading.
Tauler Smith LLP Files Lawsuit Against Chase Bank for PPP Loan Fraud
The plaintiff in the civil suit is Outlet Tile Center, a California business with six (6) employees. Outlet Tile Center provides flooring for homes and businesses, and they do their banking with Chase. The business fraud lawyers at Tauler Smith LLP filed this lawsuit on behalf of the plaintiff, who was denied an opportunity to receive much-needed financial help because of the defendants’ fraud.
Chase Bank Accused of Unfair Business Practices
In response to the coronavirus pandemic, the United States Congress passed several laws that affected businesses. For example, Congress passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and appropriated $340 billion in funds to be distributed to small businesses who needed help covering payroll. According to the lawsuit, by the time Chase Bank’s online portal opened to small businesses, the bank had already personally solicited and submitted all of the loans for its rich clients.
JPMorgan Chase & Co. received significant fees for all PPP loans they processed, so they had an incentive to push through loan applications of their rich clients. In just two (2) weeks, Chase made over $700 million in fees. Moreover, Chase had no incentive to review any of the applications and verify if the information was accurate. According to a government report, the average approved loan for Chase through this program was over $500,000. These were not the kinds of small businesses that were supposed to be receiving help through the CARES Act.
U.S. Small Business Administration Accused of PPP Loan Fraud
The other named defendant in the case is the U.S. Small Business Administration (SBA), a federal agency that exists for the purpose of supporting small businesses throughout the country. One of the ways in which the SBA provided financial assistance to small businesses during the COVID-19 pandemic was through the Paycheck Protection Program (PPP), which received additional funds through the CARES Act. The SBA allowed companies to apply for emergency PPP loans so that they could maintain their workforces even as coronavirus was causing many offices to shut down for an extended period of time. The idea was that the companies would use a certain percentage of the funds to pay their employees, and then the federal government would relieve them of the need to repay the loans.
Billions of dollars were allocated for the loans, and they were meant to help small businesses. Unfortunately, a lot of larger companies found ways around the restrictions and ended up taking a lot of that money – at the expense of the smaller businesses for which the loans were originally intended. In fact, just two (2) weeks after the PPP loans were made available, the funds had already been exhausted. This meant that many small business owners never had an opportunity to get the financial assistance they desperately needed during COVID. A lot of those small businesses were forced to close permanently, and their workforces were laid off.
Contact the California Business Fraud Lawyers at Tauler Smith LLP
If you are a small business owner who was defrauded by Chase Bank or any other entity committing unfair business practices, the attorneys at Tauler Smith LLP can help you. Call 310-590-3927, or send an email to schedule a free consultation.