---
title: "Treasury Secretary Mnuchin Warns Businesses Could Face Criminal Liability for PPP Loans"
url: https://burnaze.com/article/4d67914c-ba3c-4a1a-8501-1a4510497486
source: "1851 Franchise"
original_url: https://1851franchise.com/treasury-secretary-mnuchin-warns-businesses-could-face-criminal-liability-for-ppp-loans-2712966
category: "Regulation"
topics: ["Regulation & legal"]
published: 2020-04-28T21:16:14.000Z
modified: 2026-11-01T02:27:38.144Z
image: https://newimage.1851franchise.com/cdn-cgi/image/quality=85,format=webp,width=1280,height=720/story/featureImage/f4a55432856797bc75472e949e74c4f2644.jpg
---

# Treasury Secretary Mnuchin Warns Businesses Could Face Criminal Liability for PPP Loans

**TL;DR:** Treasury Secretary Steven Mnuchin announced that the U.S. Treasury Department will audit every PPP loan over $2 million to ensure that only eligible companies receive payouts. Businesses that falsely claimed the loan was necessary to continue operations could face criminal liability.

*originally published in 1851 Franchise on 2020-04-28. [Read the original](https://1851franchise.com/treasury-secretary-mnuchin-warns-businesses-could-face-criminal-liability-for-ppp-loans-2712966).*

## Story

**As outrage over the execution of the Small Business Administration’s** **newly replenished Paycheck Protection Program** **continues to dominate headlines, Treasury Secretary Steven Mnuchin announced on Tuesday that the U.S. Treasury Department will audit every PPP loan over $2 million to ensure that only eligible companies receive payouts.**

**The announcement arrives the morning after the Los Angeles Lakers committed to returning a whopping $4.6 million loan the organization took out from the PPP.** **In an interview with CNBC****, Mnuchin called the loan “outrageous.”**

**"This was a program designed for small businesses. It was not a program that was designed for public companies if they had liquidity," Mnuchin said.**

**The Lakers organization is only the most recent** **example of a decidedly-not-small business returning a loan to the Paycheck Protection Program****, a CARES Act initiative intended to support small businesses affected by the coronavirus pandemic.**

**PPP loans are forgivable in full, essentially turning them into grants, if recipients use 75 percent or more of their loan to retain their employees, but Mnuchin said loans of $2 million or more will be audited before they are forgiven, and any companies found to have falsely claimed that the loan was necessary to continue operations could be liable to criminal penalties.**

**“So anybody that took the money that shouldn’t have taken the money, one it won't be forgiven, and two, they may be subject to criminal liability, which is a big deal,”** **Mnuchin told Fox Business****.**

## Entities

- 1851 Franchise (publication)
- General (sector)
- Fox Business (company)
- Small Business Administration (regulator)
- coronavirus pandemic (topic)
- ppp loans (topic)
- small business administration (topic)
- U.S. Treasury Department (regulator)
- Paycheck Protection Program (regulator)
- criminal liability (topic)
- audits (topic)

---
Originally reported by 1851 Franchise (https://1851franchise.com/treasury-secretary-mnuchin-warns-businesses-could-face-criminal-liability-for-ppp-loans-2712966). Summarized by Burnaze (https://burnaze.com/article/4d67914c-ba3c-4a1a-8501-1a4510497486).