As Andrea mentioned in her last post, the Small Business Administration’s Office of Inspector General (SBA-OIG) has seen a massive increase in fraud complaints to its hotline. These are related to the CARES Act or Paycheck Protection Program (PPP). When an OIG receives a credible allegation of fraud, it will open an investigation. So, we can expect an increase of investigations by the SBA OIG following these hotline reports.
We’ve already seen criminal prosecutions for PPP fraud. Sometimes people are approached by an OIG agent and think it is no big deal–because it’s not the FBI. But that is exactly the wrong approach.
If you get a call or visit from an SBA OIG agent, what should you do?
Don’t agree to an interview. Ok, post done, thanks for coming.
I’m (partly) kidding, but it is really as simple as that. When an OIG agent calls or comes to your home or office and says he wants to ask you a few questions, you should politely decline.
Why Should I Say No to an Interview?
There are a lot of reasons to say no to the agent’s request for an interview.
First, you don’t know what the agent wants to interview you about. Yes, perhaps it is about your PPP loan, but maybe it is about something else. When you don’t know the topic of the interview, you cannot be prepared for it.
That brings me to reason number two: You want to prepare (preferably with a lawyer) for an interview with an OIG agent. You should review key documents to refresh your memory. You should look back at your PPP application and the documents you used to answer the questions. You should ask your bookkeeper or accountant questions. Let’s face it, a lot happened in 2020. If you applied for PPP funds last April, it’s now nine months later. When an agent shows up out the blue, you may not have a perfect recollection of what you said on the application or why you said it.
Third, if you don’t prepare for the interview and then make a misstatement during the interview, the government can use that misstatement as the basis for a felony charge of false statements (18 U.S.C. § 1001). We’ve seen it happen so many times to unwitting people. They “just wanted to help” or “had nothing to hide,” so they answer questions during an interview without any preparation. Then, because memories are imperfect or the person gets nervous, the person being interview says something wrong. And the government comes back later and accuses him of intentionally lying to the agent.
I have seen the situation where a client did not remember that a certain co-worker attended a meeting. So, when asked “who attended the meeting?,” he did not give that co-worker’s name. There were a bunch of people there and it was a few years earlier. The government later threatened to charge him with a false statement for not telling them that the co-worker attended the meeting. This is how small the misstatement could be to get you in trouble.
Fourth, and I would like to shout this from the rooftops: YOU ARE NOT LEGALLY REQUIRED TO AGREE TO THE INTERVIEW. When a government agent—whether it’s an FBI agent or an OIG agent—asks to talk to you, he is asking for a voluntary interview. The agent has no way to force you to answer questions without sending you a subpoena for grand jury testimony (and that means there is an active criminal investigation). There are very few times in the criminal justice system when the person under investigation holds the power, but this is one of them. No matter how intimidating the agent is, you do not need to speak with him.
Finally, you do not want to agree to an interview because there may be a criminal investigation behind the scenes. You may be under investigation for breaking the law. You do not want to be interviewed until you know the lay of the land and understand the process. We tell clients: don’t dig the hole deeper. And if you agree to an interview without preparation, you have just bought a shovel and are starting to dig.
But What Do I Say to the Agent?
I’ve found that when I explain these reasons to my clients, they understand. But then they tell me that they just didn’t know what to say to the agent to make him go away.
I get it. It’s an intimidating situation, no matter who you are. And you want to be cooperative.
So, here are some ideas of exactly what you can say:
OIG Agent: Hi (flashing badge) I’m Special Agent Jones from the SBA OIG. I’d like you ask you a few questions. Can I come inside?
You: I’m not interested in speaking with you right now.
OIG Agent: But it’s just a few questions. It will only take a couple of minutes.
You: No, thank you. I’d like to think about getting a lawyer. Can I have your card so we can get back in touch with you?
OIG Agent: Is there a better time I can come back to talk to you? Like I said, it will only take a few minutes. Don’t you want to help me?
You: I will think about it. Can I have your card so I can get back in touch with you?
Be polite and be firm. Repeat the last sentence if the agent is not getting the picture. Getting the agent’s card is helpful because then your lawyer can get back in touch with the agent later. It’s an intimidating moment and the agents know that. They use that intimidation factor to encourage people to be interviewed. Don’t fall into that trap. PUT DOWN THE SHOVEL.
Will the Agent Be Suspicious If I Say I Want to Get a Lawyer?
For starters, the agent is already suspicious because he showed up at your house unannounced to ask you questions. Saying you may want to get a lawyer is not creating the problem here.
Also, OIG and FBI agents are used to dealing with lawyers. They interview people all the time who have lawyers, and they know it is part of the process. Completely innocent people get lawyers to make sure they don’t do or say anything stupid. Agents know the drill.
We’ve heard of aggressive agents asking people who say they may want to get a lawyer, “Why do you need a lawyer? Do you think you did something wrong?” This happens very rarely, but it does happen. You do not need to answer that question/accusation. Just repeat, “I’ll think about the interview. Can I have your card so I can get back in touch with you?”
Even if getting a lawyer marginally increase the agent’s suspicion level, that is a very small risk relative to the risks of being interviewed without a lawyer’s help.
This is why I suggest not saying “no” outright, but asking for the agent’s card to get back in touch with him. You don’t need to slam the door in the agent’s face (we would definitely recommend against that approach!). In fact, you may agree later to an interview, once you understand what the interview will be about and evaluate if you face any liability.
What Happens After I Hire a Lawyer?
Every lawyer works a bit differently, but I can tell you how we would help you. Our first step is to talk with you to understand what happened—are you worried about a PPP loan? Is there something else that may have gone wrong? We will find out about your company and what you think may be the problem.
We’ll then contact the OIG agent (see how important it is to get his card?) to ask him what he wants to talk to you about. We’ll probe why he thinks you may have done something wrong. We’ll ask if there is a criminal investigation or if it is only an OIG investigation. Although the agent is not under any obligation to tell us anything, it is often a fairly cooperative process because the agent wants to interview you—and get the case off his to-do list—and we want to find out the topics to prepare you.
Once we have the lay of the land, we’ll talk with you about strategy and whether it makes sense to agree to the interview. Sometimes, it does make sense. In that case, we’ll help prepare you for the interview and attend it with you. Or we’ll together decide that it doesn’t make sense for you to agree to an interview, and we’ll call the agent to let him know that. The investigation may keep going, and we would then be the intermediary between you and the SBA OIG.
Either way, you won’t be alone through the process.