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Welcome to Spodek Law Group. Our goal is to provide you with honest information about your PPP exposure so you can make smart decisions about your future. If you received a PPP loan in 2020 and you’re reading this in 2025, you probably assumed the danger had passed. Five years feels like a long time. The pandemic is over. The program ended. You thought the statute of limitations would protect you by now.
Here’s what you need to understand immediately: the 5-year clock you were watching was the wrong clock. In August 2022, Congress extended the statute of limitations for PPP fraud to 10 years. That means a 2020 loan doesn’t expire until 2030 at the earliest—and depending on when you filed for forgiveness, your exposure might extend to 2031 or 2032. The question isn’t whether you’re safe because five years passed. The question is why you’re just now reaching the front of the line.
The reality is worse than most people realize. While you were waiting for the statute to run out, the government was building cases. They flagged approximately 40% of all 2020 PPP loans through automated cross-referencing. If you’re worried enough to be searching for this answer, there’s probably a reason—and the algorithm likely agrees with your instincts.
Most people who recieved PPP loans in 2020 did the same mental math. Wire fraud has a 5-year statute of limitations. Bank fraud has a longer window, but if you went through a fintech lender like Kabbage or BlueAcorn, that wasnt technically “bank fraud.” So April 2020 plus five years equals April 2025. Your safe by now.
Heres the thing about that calculation: it was right when you made it. But it became wrong in August 2022.
Thats when President Biden signed two laws that rewrote everyones timeline. The PPP and Bank Fraud Enforcement Harmonization Act of 2022 and the COVID-19 EIDL Fraud Statute of Limitations Act of 2022 both did the same thing—they extended the window for prosecution to 10 years, regardless of which lender processed your loan.
Think about what that means practicaly. If you recieved your loan in April 2020, prosecutors now have until April 2030 to charge you. If you got your loan in May 2021 during the second round, there looking at May 2031. And if your forgiveness application wasnt filed until 2022, the clock might not even start until then.
The 5-year illusion destroyed people. They thought time was on there side. They assumed that if nobody had contacted them by 2025, they were in the clear. But 2025 isnt the finish line. Its actualy closer to the starting gun for there exposure.
OK so lets break down exactly what Congress did, becuase the mechanics matter.
Before August 2022, PPP fraud could be charged under several statutes. Wire fraud (18 U.S.C. § 1343) had a 5-year limitation. Bank fraud (18 U.S.C. § 1344) had a 10-year limitation—but only applied if the lender was a traditional “financial institution.” Making false statements to the SBA had its own timeline.
Heres the problem prosecutors faced: millions of PPP loans went through fintech lenders that werent traditional banks. Kabbage, BlueAcorn, Womply, Cross River Bank processing for online platforms—these didnt clearly fit the “financial institution” definition that triggers the 10-year bank fraud statute.
So two people could commit identical fraud. Same false payroll numbers. Same fabricated business. Same misuse of funds. But if one person happened to apply through Chase and another through BlueAcorn, they faced completly diffrent exposure windows. The Chase borrower could be prosecuted until 2030. The BlueAcorn borrower would supposedly be safe by 2025.
Congress looked at that situation and called it absurd. Fraud is fraud. The lender you randomly chose—whoever got you approved fastest—shouldnt determine wheather you go to prison.
The 2022 laws harmonized everything. Now all PPP fraud has a 10-year statute, period. Dosent matter if your lender was a 150-year-old bank or a fintech startup operating out of a WeWork. The governments window is 10 years either way.
And heres the part that really matters: the law applies retroactivly. Defendants have challenged this, arguing you cant change the rules after the game. Courts have consistantly rejected those arguments. As long as the original statute hasnt expired when Congress extends it, the extension is valid. You dont have a “vested right” in the clock running out until it actualy runs out.
Lets talk about something that should concern you deeply if your reading this article right now.
The COVID-19 Fraud Enforcement Task Force has built a permanent prosecution infrastructure. Strike forces in major cities. Dedicated prosecutors in every U.S. Attorneys office. Billions in funding. Coordination between FBI, IRS Criminal Investigation, SBA-OIG, Secret Service, and other agencies. This isnt a temporary effort. There in it for the long haul.
Your forgiveness application may have reset the clock to 2031 or 2032—and the government has the resources to wait.
But heres what most people dont understand: the government isnt looking for fraud. There processing a backlog of fraud they already found.
In August 2024, SBA officials disclosed that aproximately 54,000 PPP loans had been referred to the Office of Inspector General for likely fraud. Another 77,000 were escalated internaly for additional review. Thats over 130,000 loans sitting in a queue—loans the government has already identified as problematic.
The automated systems that flagged these loans didnt require human investigators. The SBA cross-referenced PPP applications against tax returns, bank records, state incorporation filings, and payroll databases. If the numbers didnt match, the loan got flagged. This happened years ago. The flagging is essentialy complete. What there doing now is processing the queue in order.
Think about what that means for 2025 specificaly. The DOJ has charged aproximately 3,500 defendants so far. Thats a fraction of those 130,000+ flagged loans. The prosecutors are working through the backlog systematicaly. And 2020 loans—the oldest in the system—are naturaly at the front of the line.
If you recieved a PPP loan in 2020 and your application had problems, 2025 isnt the year you become safe. Its the year you become next.
Heres something that almost nobody considers, and it could add years to your exposure.
The statute of limitations dosent necessaraly start from when you recieved the loan. It starts from your last fraudulent act related to that loan. For most people, that wasnt the application—it was the forgiveness application.
Think about the timeline. You got your PPP loan in April or May 2020. You used the funds over the next few months. Then, probably in late 2020 or sometime in 2021, you applied for loan forgiveness. That forgiveness application required certifications—statements about how you used the funds, wheather you maintained payroll, wheather you followed the rules.
If those certifications were false, thats when your fraud was completed. Not in 2020 when you got the loan. In 2021 or even 2022 when you sought forgiveness.
OK so lets do the math. If you filed for forgiveness in March 2022, and Congress extended the statute to 10 years, your exposure runs until March 2032. Thats seven more years from now—not the zero years you thought you had.
Heres the irony that destroys people: you filed for forgiveness to close the chapter. To put the PPP loan behind you. To move on. But that forgiveness application—the thing that was supposed to end your exposure—actualy extended it. You reset the clock on yourself.
And every statement in that forgiveness application is fair game. Prosecutors can charge you with the original loan fraud AND the forgiveness fraud. You potentialy doubled your charges trying to put the matter to rest.
Lets talk about the numbers that should keep you up at night.
According to SBA data, there automated fraud detection systems flagged aproximately 40% of all PPP loans issued in 2020. Forty percent. Thats not a typo.
Heres the thing about that number: if your reading this article, if your worried enough to search for answers about PPP prosecution risk, you probably have a reason to be worried. Maybe your payroll numbers were inflated. Maybe your business wasnt as operational as you claimed. Maybe you used the funds for things that werent strictly payroll.
The algorithm already knows. It cross-referenced your application with your 2019 tax returns before most people even knew what cross-referencing meant. It compared your claimed employee count to your state unemployment insurance filings. It checked wheather your EIN was even active. It looked at your bank account to see if deposits matched your claimed revenue.
If there was a mismatch—any mismatch—your loan got flagged.
At Spodek Law Group, weve seen the pattern repeatedly. People assume that becuase nobody has contacted them, there loan wasnt flagged. But flags dont generate immediate contact. Flags generate a place in line. A queue position. The government is working through that queue methodicaly, with no pressure to hurry. They have until 2030 or 2031 or 2032 depending on your specific timeline.
If you think your in the clear becuase its been quiet, consider this: the defendants being charged in 2025 submitted there applications in 2020. They had years of silence before the knock on the door.
Look at the recent cases. Carl Delano Torjagbo from Marietta, Georgia was convicted in July 2025 for a $9.6 million PPP fraud scheme—he applied back in 2020. Teldrin Foster got 121 months in federal prison in June 2024 for his role in a PPP conspiracy. A Philadelphia banker recieved 65 months in October 2024 for running a scheme where he recruited businesses to submit false applications. In November 2025, six family members in Brooklyn were indicted for $166,000 in fraud from applications submitted in 2021. These arent ancient cases being prosecuted. These are recent convictions for applications from years ago.
Many people assume that if there PPP loan was relatively small, prosecutors wont bother. Why would the federal government spend resources on a $20,000 case when there are millions in larger schemes?
The amount of your loan does not determine whether they prosecute you.
In March 2024, a Cincinnati man named Kelton McClarrin was sentenced to 18 months in federal prison for PPP fraud. The amount he stole? Just under $21,000.
Let that sink in for a moment. Eighteen months in federal prison. For less than most people spend on a used car.
McClarrin submitted an application claiming he was the sole owner of a business with $100,000 in gross income for 2019. He submitted a forged bank statement. When he got the money—not even $21,000—he spent it on personal expenses. CashApp transfers. Grubhub deliveries. DoorDash orders. Facebook purchases. Hotels.
Nothing sophisticated. Nothing that required forensic accountants to uncover. Just obvious fraud with obvious misuse. And 18 months in federal prison as a result.
Heres what Todd Spodek has observed representing clients in these cases: prosecutors actualy prefer small-dollar cases in some ways. The cases are simpler. The facts are cleaner. And the headlines—”Local Man Gets 18 Months for $21,000 PPP Fraud”—send a message to everyone else. The DOJ wants regular people to see that there is no amount to small to prosecute.
Think about what that means for you. If your loan was $30,000, or $50,000, or $75,000, you might think your small fish. But the McClarrin case proves that small fish go to federal prison too. The amount dosent protect you. The only thing that protects you is not having committed fraud—or having addressed the situation before prosecutors got to your file.
Theres a temptation to do nothing. To keep your head down. To hope that your file stays buried in the pile. Maybe they wont get to you. Maybe there are bigger cases to pursue. Maybe by 2030 the whole effort will have wound down.
This is the worst possible strategy, and heres why.
Every month you wait, several things happen that make your situation worse:
First, the governments case gets stronger. There still interviewing people. There still gathering documents. There still running there data matching algorithms. The evidence against you isnt static—its growing. And your not part of the conversation. You have no opportunity to explain, provide context, or correct misunderstandings.
Second, your cooperation value drops. Federal prosecutors reward early cooperation. The person who comes forward before being caught gets substancially more credit than the person who cooperates only after being charged. If you wait until an FBI agent contacts you, youve already lost the most powerfull card you could play.
Third, witnesses forget and documents disappear. Maybe you had a legitimate explanation for something that looks bad on paper. Maybe there was a miscommunication with your accountant. Maybe the payroll software calculated things wrong. By the time prosecutors reach your file in 2027 or 2028, your accountant has moved on, your records are incomplete, and your own memory is hazy.
Fourth, the stress compounds. Weve seen what years of uncertainty does to people. The constant checking of the mailbox. The wondering whether today is the day. The spouse asking “have you heard anything?” The inability to plan for the future. That psychological toll is massive—and completly unnecessary if you address the situation proactively.
Fifth, you miss the window for voluntary disclosure. Some defendants have successfuly reduced there exposure by coming forward before being caught. Returning funds. Paying restitution. Cooperating with investigators. The governments willingness to work with you drops dramaticaly once theyve invested years in building a case against you. Early cooperation is rewarded. Late cooperation looks like desperation.
Heres the bottom line: your not waiting for the problem to go away. Your waiting for the government to finish building a case against you. Every month that passes, the case gets stronger and your options get fewer.
And lets be clear about what happens when the government finaly does reach your file. IRS Criminal Investigation reports a 97.4% conviction rate in prosecuted COVID fraud cases. Of the 2,532 defendants found guilty as of December 2024, only 117 won at trial. The rest—2,415 of them—either pled guilty or were convicted by a jury. Thats not a system you want to fight unprepared. Thats a system where the outcome is virtualy predetermined once charges are filed. The only real leverage you have is before that happens.
And sentencing isnt gentle. According to Sentencing Commission data, 81% of PPP fraud defendants recieve some form of incarceration. The average is around 24 months—but that includes people who cooperated early and got substancial departures. Defendants who fought it or showed up late with there cooperation faced much higher sentences. Were talking 40, 60, even 80 months for people who made prosecutors work for it. Federal prison isnt county jail. Theres no early release for good behavior. You serve 85% of whatever sentence you get, minimum. Thats the reality people need to understand before they decide to just wait and see what happens.
Your situation falls into one of three categories. Your next steps depend on which one applies.
Category 1: Your application was completely accurate. Keep your records for at least 10 years—idealy until 2032 to cover any forgiveness-related exposure. If the government ever has questions, you want to be able to prove everything was legitimate.
Category 2: Your application had some inaccuracies, but nobody has contacted you yet. This is where proactive consultation becomes critical. Todd Spodek and the team at Spodek Law Group can evaluate your actual exposure, explain your realistic options, and help you develop a strategy. In some cases, voluntary disclosure through proper channels can dramaticaly reduce your risk. In other cases, preparation for potential contact is the better approach. But waiting—just hoping nobody notices—is almost never the right answer.
Category 3: Youve been contacted by federal agents or received official notice about your PPP loan. Stop reading this article and call a lawyer immediately. Do not talk to investigators. Do not provide documents. Do not try to explain or clear things up. Everything you say will be used against you. Your only response should be: “I’d like to speak with an attorney before answering any questions.”
The 10-year clock is running. The governments backlog is being processed. And 2020 loans are at the front of the line.
If your PPP loan application wasnt 100% accurate, call Spodek Law Group at 212-300-5196 before the government calls you. The question isnt wheather they will eventualy review your loan. The question is what position youll be in when they do.
You thought 2025 would be the year you were finally safe. Instead, its the year you need to take action. The 5-year clock ran out—but the 10-year clock is still ticking.
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