WTAII PLLC co-founder and former Assistant United States Attorney Ray D. McKenzie shared a few thoughts with Law360 about the initial prosecutions being brought in connection with the federal Paycheck Protection Program and investigations that may be on the horizon for financial institutions. Thousands of financial institutions have participated in the program, which was designed to help qualifying businesses avoid layoffs by providing loans that are forgivable under certain conditions. Several weeks after billions of dollars were disbursed by financial institutions participating in the program, federal and state authorities issued subpoenas to several major banks. Shortly thereafter, the U.S. Department of Justice brought an initial set of charges against individual applicants who allegedly committed fraud or provided false statements in their PPP loan applications. Drawing upon his experience as a federal prosecutor, McKenzie suggested that financial institutions likely are not the targets of current investigations for which the subpoenas were issued. He cautioned, however, that financial institutions could face scrutiny if investigations suggest systemic failures with the diligence required under applicable laws.
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