Thanks for visiting Federal Lawyers – a second-generation law firm managed by our lead attorney, with over 40 years of combined experience handling federal criminal defense. If federal investigators contacted you about your PPP or EIDL loan, if you received an SBA audit letter, or if you got a grand jury subpoena – you’re facing a federal investigation. South Carolina has seen aggressive prosecution of pandemic loan fraud in Charleston, Columbia, and Greenville.

This article explains PPP and EIDL fraud charges in South Carolina, how federal prosecutors build cases, what penalties you face, and what to do now. We represent clients in South Carolina’s federal district and nationwide.

Federal Pandemic Loan Fraud in South Carolina

The District of South Carolina – covering Charleston, Columbia, Greenville, and surrounding areas – has prosecuted numerous PPP and EIDL fraud cases since 2020. The SBA Office of Inspector General identified hundreds of millions in potentially fraudulent loans across the state. Federal investigators work with the FBI, IRS Criminal Investigation, and SBA fraud units.

PPP loans covered payroll costs during the pandemic. EIDL loans provided economic injury disaster assistance for operating expenses. Both required truthful applications. Lying on either application – about your business, employees, revenue, expenses, or how you spent money – is federal fraud.

Your loan gets flagged when discrepancies appear between your application and other records. Maybe your PPP payroll numbers don’t match your tax returns. Maybe your EIDL revenue claims exceed what you reported to the IRS. Maybe you applied using businesses that didn’t exist. Maybe you spent loan money on personal expenses instead of business costs. These inconsistencies trigger investigations.

Federal investigators prioritize larger loans but prosecute smaller amounts too. They cross-reference applications with IRS data, state employment records, banking transactions, and business registrations. When numbers don’t match – you get investigated.

Federal Charges in PPP and EIDL Fraud

Wire fraud is standard. Submitting electronic loan applications uses interstate communications – that’s 18 U.S.C. § 1343, carrying up to 20 years in federal prison.

Bank fraud applies when you lied to financial institutions. That’s 18 U.S.C. § 1344 – maximum 30 years in prison and $1 million in fines.

False statements to the SBA violate 18 U.S.C. § 1014. If you lied about employee counts, payroll expenses, revenue, or eligibility – you’re facing 30 years.

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Legal Scenario: What Would You Do?

Scenario

You applied for a $150,000 PPP loan for your Charleston landscaping business, but inflated your payroll numbers by adding employees who hadn't worked for you in over a year. Now an SBA Office of Inspector General agent has scheduled an interview and requested all your payroll tax filings for 2019 and 2020.

Can I still fix this before criminal charges are filed, or is it too late once the OIG reaches out?

Attorney's Answer

It is not too late, but you need to act immediately and with experienced counsel. PPP fraud is prosecuted under 18 U.S.C. § 1343 (wire fraud) and 18 U.S.C. § 1014 (false statements to a financial institution), carrying penalties of up to 20 and 30 years respectively. In some cases, we can negotiate a voluntary disclosure or repayment arrangement with the SBA before the matter is referred to the DOJ for indictment. The critical thing right now is that you do not speak with the OIG agent or provide any documents without your attorney present, because anything you say can be used to build additional charges under 18 U.S.C. § 1001 for making false statements to federal agents.

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

Money laundering charges get added when you moved funds to hide spending or transferred money overseas. That’s 18 U.S.C. § 1956 – up to 20 years.

Conspiracy charges apply when others were involved – accountants, business partners, consultants. If they helped prepare false documents or knew about inflated numbers, prosecutors charge conspiracy to commit fraud. Conspiracy carries the same penalties as the underlying offense.

What Prosecutors Must Prove