ppp loan stacking fraud lawyers

Thanks for visiting Federal Lawyers, a second-generation criminal defense firm managed by our lead attorney – with over 50 years of combined experience defending federal fraud prosecutions nationwide. If you’re facing charges for PPP loan stacking, you’re accused of one of the most aggressively prosecuted forms of pandemic fraud: obtaining multiple PPP loans through different entities that prosecutors claim were created or used improperly to multiply loan amounts beyond what you were legitimately entitled to receive. Federal prosecutors treat loan stacking as sophisticated fraud schemes rather than good-faith mistakes, charging defendants with bank fraud carrying 30-year maximums, wire fraud, false statements, and sometimes conspiracy and money laundering when multiple people were involved or funds were moved in ways prosecutors claim demonstrate criminal intent. What makes stacking cases particularly dangerous is that prosecutors don’t need to prove all the loans were fraudulent – they can charge you for obtaining multiple loans even if some were legitimate, arguing that the pattern demonstrates intent to defraud the program.

What Prosecutors Call Loan Stacking

The term “loan stacking” describes obtaining multiple PPP loans through different applications that prosecutors claim violated program rules. The most common stacking scenarios federal prosecutors charge include: applying through multiple entities you own or control, using the same employees or payroll across multiple applications to inflate total loan amounts, creating shell companies with no legitimate business operations solely to submit additional applications, applying as both an individual and through business entities for the same payroll, and submitting applications for related entities without discclose the relationships to lenders.

PPP program rules prohibited businesses from receiving more than one loan per entity, and required applicants to certify they hadn’t applied for or received loans through other entities covering the same employees or payroll expenses. Prosecutors argue that submitting multiple applications covering the same employees or payroll constitutes fraud even if each individual application was technically accurate in isolation. They claim the pattern demonstrates you knowingly exploited the program to obtain funds you weren’t entitled to receive.

Common Stacking Scenarios Prosecutors Charge

One scenario involves business owners who legitimately operate multiple separate entities – separate LLCs or corporations with distinct operations, employees, and business purposes – and who applied for PPP loans through each entity. Prosecutors charge these as stacking schemes when they claim the entities aren’t truly separate: they share employees, operate from the same location, perform similar services, or are managed by the same people. Defense argues the entities are legitimately separate businesses entitled to individual loans under program rules, while prosecutors claim they’re shells created to multiply loan amounts.

Another scenario involves business owners who applied as sole proprietors or independent contractors and also applied through business entities they own. Program rules allowed individuals to receive loans based on self-employment income, but prohibited receiving multiple loans covering the same income or expenses. Prosecutors charge these cases arguing the individual and business applications covered the same payroll or income, while defendants claim they legitimately had both self-employment income and separate business payroll qualifying for distinct loans.

DEFENSE TEAM SPOTLIGHT

Todd Spodek

Lead Attorney & Founder

Featured on Netflix's "Inventing Anna," Todd Spodek brings decades of high-stakes criminal defense experience. His aggressive approach has secured dismissals and acquittals in cases others deemed unwinnable.

NY Bar Admitted Multi-State Licensed Federal Courts

Meet the Full Team

Legal Scenario: What Would You Do?

Scenario

You submitted PPP loan applications through three separate LLCs you owned, each claiming the maximum number of employees and payroll expenses, and now a federal grand jury has returned a multi-count indictment alleging you fraudulently stacked over $2 million in forgivable loans. Bank records show the funds were commingled into a single account and used for personal purchases rather than legitimate payroll.

What kind of penalties am I facing for stacking multiple PPP loans, and is there any way to reduce my exposure?

Attorney's Answer

PPP loan stacking is prosecuted under 18 U.S.C. § 1343 (wire fraud) and 18 U.S.C. § 1344 (bank fraud), each carrying up to 30 and 20 years respectively, and prosecutors often add conspiracy charges under 18 U.S.C. § 1349 that carry equal penalties. The DOJ's COVID-19 Fraud Enforcement Task Force has made stacking cases a top priority, and courts have imposed sentences well above guidelines when defendants used shell companies to multiply fraudulent applications. However, voluntary repayment of loan proceeds before indictment, cooperation with investigators, and demonstrating that at least some funds were used for legitimate payroll can significantly reduce sentencing exposure. An experienced federal defense attorney can negotiate with prosecutors to consolidate charges, challenge the government's loss calculations under U.S.S.G. § 2B1.1, and present mitigating factors that may keep your sentence far below the statutory maximums.

This is general information only. Contact us for advice specific to your situation.

Identity Theft and Nominee Stacking

More serious stacking cases involve defendants who prosecutors allege used stolen identities or nominee applicants to submit multiple fraudulent applications. These cases often involve dozens or hundreds of applications using fabricated businesses, stolen Social Security numbers, and false documentation. Prosecutors charge these as organized fraud schemes, adding conspiracy charges under 18 U.S.C. § 371, aggravated identity theft charges under § 1028A carrying mandatory consecutive 2-year sentences, and money laundering charges when funds were moved between accounts or withdrawn as cash. These cases result in the harshest sentences – defendants with no prior records receiving 8-10 years in federal prison for conduct prosecutors frame as systematic exploitation of pandemic relief programs.

Defenses to Loan Stacking Charges