Can you go to prison for PPP loan fraud?

| by Max Soni

Thanks for visiting Spodek Law Group. We’re a second-generation law firm managed by Todd Spodek – who has over 40 years of combined experience handling federal criminal cases. You’ve probably heard of us if you follow major federal prosecutions. In 2022, Netflix released a series about one of Todd’s clients: Anna Delvey, the fake heiress who conned New York’s elite. We also represented the juror in the Ghislaine Maxwell misconduct scandal – a case that made national headlines. We take on cases other firms won’t touch, cases they say are unwinnable.

PPP loan fraud is a federal crime – and yes, you absolutely can go to prison for it. The government is still prosecuting these cases in 2025, years after the pandemic ended. This article explains the criminal charges you face, the prison time involved, and what actually determines your sentence when federal prosecutors come after you for Paycheck Protection Program fraud.

Federal prosecutors treat PPP fraud like any other fraud against a government program. They charge it as bank fraud, wire fraud, or both – depending on how you submitted the application and what lies you told. The Department of Justice has made it clear they’re aggressively prosecuting anyone who stole from pandemic relief programs, and the sentences reflect that priority.

Bank fraud under 18 U.S.C. § 1344 carries up to 30 years in federal prison and fines up to $1 million. Wire fraud under 18 U.S.C. § 1343 carries up to 20 years. These aren’t theoretical maximums – federal judges hand down multi-year sentences regularly in PPP cases. In September 2025, a New Jersey business owner got 41 months for fraudulently obtaining $3.2 million in PPP loans. In June 2025, a scheme leader received 51 months for $900,000 in fraudulent loans. A Nevada defendant got over 15 years in August 2025 for an $11 million fraud involving money laundering.

The amount you stole matters most for sentencing. Federal sentencing guidelines calculate loss amounts to determine your offense level – and higher loss amounts mean exponentially longer prison sentences. Someone who fraudulently obtained $50,000 faces a completely different sentence than someone who took $500,000 or $5 million. The guidelines aren’t just suggestions anymore after the Booker decision made them advisory, but judges still follow them closely in fraud cases. Federal prosecutors know exactly how to calculate loss amounts to maximize your exposure.

Your role in the scheme determines whether you’re looking at the low end or high end of the guideline range. Leadership roles – organizing the fraud, recruiting others, managing multiple applications – add significant enhancements to your sentence. If you ran a PPP fraud operation, even a small one, expect prosecutors to argue for aggravating role adjustments that can add years to your sentence. A Des Moines man got 54 months in March 2025 for wire fraud and money laundering after fraudulently obtaining nearly $2 million. That’s four and a half years in federal prison where you serve at least 85% of the sentence.

Money laundering charges pile on when you try to hide the fraudulent proceeds. Using PPP funds to buy luxury items, real estate, or funneling money through multiple accounts – that’s money laundering under 18 U.S.C. § 1956. It’s a separate charge with its own prison time, and prosecutors love stacking it onto fraud charges. What you did with the money matters during sentencing. Judges want to know if you bought cars, jewelry, took vacations – or if you tried to pay employees and keep a business running. Neither justifies the fraud, but one shows pure greed while the other shows desperation.

Cooperation with federal investigators can cut your sentence dramatically – sometimes in half or more under Rule 35(b) motions. But cooperation means substantial assistance, not just admitting what they already know. You need to provide information about other targets, testify if needed, and do it early enough that prosecutors can actually use what you give them. The government files a 5K1.1 motion or Rule 35(b) motion asking the judge to depart below the guideline range. We’ve gotten clients significant reductions through cooperation, but it requires a strategy from day one – not something you figure out after conviction.

Acceptance of responsibility under the sentencing guidelines gives you a two or three level reduction if you plead guilty and don’t minimize your conduct. It’s not automatic – you actually have to accept what you did without excuses. Federal judges see through half-hearted acceptance where defendants blame everyone else or claim they didn’t know the rules. Real acceptance means acknowledging the fraud, the harm to the program, and taking responsibility for your choices. Combined with cooperation, acceptance of responsibility can make the difference between a decade in prison and a few years.

The government’s investigation doesn’t end just because you got the money years ago. IRS Criminal Investigation, FBI, and the SBA Office of Inspector General are still pursuing PPP fraud cases in 2025 with dedicated task forces and funding specifically allocated for pandemic fraud recovery. The statute of limitations for wire fraud and bank fraud is typically five years, but it can extend to ten years for fraud affecting financial institutions. They have time, and they’re using it.

Prior criminal history escalates everything in federal court. The criminal history category combines with your offense level to determine the guideline range on the sentencing table. Someone with no criminal record might get probation or a low-end sentence for a smaller fraud, but any prior felonies – especially fraud or theft – put you in a higher criminal history category where even modest frauds result in prison time.

Restitution is mandatory in federal fraud cases. You will be ordered to pay back every dollar, and it doesn’t go away with bankruptcy. Federal restitution follows you for life until it’s paid. The Bureau of Prisons can take money from your commissary account, the government can garnish wages after release, and supervised release conditions will require payment plans. A Detroit man was ordered to pay over $650,000 in restitution in addition to prison time for his role in a $14.5 million PPP fraud scheme. The money has to come back, one way or another.

Our criminal defense attorneys at Spodek Law Group handle federal fraud cases coast to coast – including PPP prosecutions rolling out across every federal district. We’ve represented clients in high-profile federal cases where media attention creates additional pressure, and we’ve handled complex fraud schemes involving multiple defendants and millions of dollars. Todd Spodek built his reputation on taking cases others said were impossible to win.

If you’re under investigation or already charged with PPP fraud, the decisions you make now determine whether you’re looking at probation, a few years, or a decade-plus in federal prison. Federal prosecutors have the resources and the political will to pursue these cases aggressively – Acting U.S. Attorneys have publicly stated they’re going after everyone who defrauded pandemic relief programs. The sentencing outcomes in 2025 show they mean it. Your best chance is a defense strategy built on understanding federal sentencing mechanics, identifying weaknesses in the government’s case, and knowing when cooperation or mitigation makes sense versus fighting charges at trial. This is what we do, and we’re available 24/7 because federal investigations don’t wait for business hours.