Aggravated Identity Theft Charges in EIDL Fraud Cases: Mandatory Minimums

Thanks for visiting Spodek Law Group – a second-generation law firm managed by Todd Spodek. We have over 40 years of combined experience defending federal fraud prosecutions. If you’re facing EIDL or PPP fraud charges involving someone else’s identity information, you need to understand aggravated identity theft under 18 USC §1028A. This charge carries a mandatory two-year prison sentence that runs consecutive to whatever you get for the underlying fraud – and judges have almost no discretion to reduce it.

The Mandatory Minimum Is Brutal

Section 1028A recognizes two classes of predicate offenses. Terrorist offenses carry a mandatory five-year consecutive sentence. Everything else – including fraud – carries a mandatory two-year consecutive sentence.

“Consecutive” means the two years run on top of your fraud sentence, not at the same time. If you get 18 months for wire fraud and you’re also convicted of aggravated identity theft, your total sentence is 42 months – 18 months for the fraud plus 24 months for identity theft.

The statute covers over 60 federal theft, fraud, immigration and related felonies as predicate offenses. PPP and EIDL fraud cases almost always involve predicate offenses – bank fraud, wire fraud, false statements to financial institutions.

Judges cannot sentence you to less than two years for aggravated identity theft except in extremely rare circumstances. There’s a narrow exception under 18 USC §3553(e) allowing departure based on substantial assistance to the government, but prosecutors must file a motion requesting it. You can’t get below the mandatory minimum without the government’s cooperation.

What Qualifies as Identity Theft in EIDL Cases

Aggravated identity theft requires that you “knowingly transferred, possessed, or used, without lawful authority, a means of identification of another person” during and in relation to a predicate felony.

In EIDL and PPP fraud cases, this typically involves using someone else’s Social Security number, Employer Identification Number, or personal identifying information on loan applications. You don’t need to steal the identity information yourself – using it is enough.

Say you bought a “fullz” package online containing someone’s name, SSN, date of birth and address. You used that information to create a fake business and apply for an EIDL loan. That’s aggravated identity theft even though you weren’t the one who originally stole the data.

OIG reports identified $6.7 billion in EIDL loans and grants related to identity theft allegations. Over 70,000 PPP loans totaling more than $4.6 billion were flagged as potentially fraudulent, with many involving identity theft.

Synthetic Identity Fraud Counts Too

Synthetic identity fraud – combining real and fake information to create a fictitious identity – qualifies as aggravated identity theft if you used any real person’s identifying information without authorization.

You might create a fake business using a real person’s SSN combined with a fake name and address. As long as you used someone else’s SSN without permission, you’ve met the elements of §1028A.

Courts have held that using a real SSN attached to a fake identity still constitutes identity theft because you’re using another person’s means of identification without authority.

The “Knowingly” Requirement Isn’t Much of a Defense

The statute requires that you “knowingly” used another person’s means of identification. Some defendants argue they didn’t know the SSN belonged to a real person, or they thought it was a randomly generated number.

Courts reject these arguments. If you used an SSN that happens to belong to someone else, and you had no lawful authority to use it, you’ve met the knowledge requirement. You don’t need to know whose SSN it was or intend to harm that specific person.

The Supreme Court’s decision in Flores-Figueroa v. United States held that the government must prove you knew the identification belonged to “another person” – but not that you knew the identity of that person. As long as you knew you were using someone else’s real identifying information rather than a completely fabricated number, that’s sufficient.

How Prosecutors Prove Identity Theft in EIDL Cases

The government proves identity theft through Social Security Administration records showing the SSN belongs to someone other than you. They’ll often locate the real person and have them testify that they never authorized you to use their SSN.

In synthetic identity fraud cases, prosecutors subpoena credit bureau records showing that an SSN is associated with a real person’s credit file. That proves the SSN wasn’t randomly generated – it belongs to an actual individual.

Bank records showing you received EIDL funds in an account linked to someone else’s identifying information provide direct evidence. Wire transfer records, deposit slips and account opening documents all connect you to the fraudulent use of identity information.

Even One Instance Triggers the Mandatory Minimum

You don’t need to steal dozens of identities. Using one person’s SSN on one fraudulent EIDL application is enough to trigger the mandatory two-year consecutive sentence.

Multiple identity theft counts don’t necessarily add more time. If you used three different people’s SSNs on three loan applications, you might face three counts of aggravated identity theft – but courts typically run those sentences concurrently with each other, not consecutively. So you’re still serving two years total for the identity theft, not six.

The consecutive nature of the sentence in relation to the underlying fraud is what hurts most. Even if the judge wants to give you probation for a small EIDL fraud, the identity theft charge forces at least two years in federal prison.

Cooperation Is the Only Path to Avoiding the Mandatory Minimum

Section 3553(e) allows judges to sentence below the mandatory minimum if the government files a motion based on your substantial assistance. This requires cooperating with federal prosecutors in investigating or prosecuting other defendants.

Real cooperation means identifying co-conspirators, explaining how the fraud scheme worked, testifying at trial if necessary and potentially wearing a wire to record conversations with targets. You’re helping the government build cases they couldn’t build without you.

The government evaluates cooperation based on its usefulness, not your willingness to help. If you volunteer to cooperate but you don’t have information the government needs, they won’t file a §3553(e) motion. If all you can do is admit your own conduct, that’s acceptance of responsibility – not substantial assistance.

We’ve represented defendants who provided substantial assistance leading to multiple additional prosecutions. The government filed §3553(e) motions, and judges sentenced them to probation or time served on both the fraud and identity theft charges. But this outcome requires giving prosecutors something valuable.

Defending Against Aggravated Identity Theft Charges

The best defense is avoiding the charge in the first place through negotiation with prosecutors before indictment. If the evidence of identity theft is weak, or if you can demonstrate you reasonably believed you had authority to use the identifying information, prosecutors might agree not to include §1028A in the charges.

Once you’re indicted, your trial defenses are limited. You can argue that the SSN didn’t actually belong to another person (maybe it was legitimately issued to you or your business). You can argue you had lawful authority to use it (perhaps the person gave you permission). You can argue it wasn’t used “in relation to” the predicate fraud.

These defenses rarely succeed. The government’s burden of proof is low, and the statute is broadly written.

Pleading to Avoid Identity Theft Counts

Sometimes prosecutors will agree to drop aggravated identity theft charges in exchange for a guilty plea to the underlying fraud. This eliminates the mandatory minimum and gives the judge full discretion at sentencing.

The government typically requires something in return – full cooperation, substantial restitution, testimony against co-defendants. They won’t drop a §1028A charge just because you agree to plead guilty to fraud. They’ll drop it if doing so advances their broader prosecution goals.

The Impact on Sentencing Is Massive

Adding a mandatory two-year consecutive sentence transforms the sentencing landscape. A defendant who might have received probation for a small fraud instead goes to federal prison for at least two years. A defendant who would have gotten 12 months for the fraud now serves 36 months.

The identity theft sentence cannot be reduced for acceptance of responsibility. It cannot be served concurrently with the fraud sentence. It cannot be reduced through a downward departure or variance except with government approval.

This is why prosecutors love charging §1028A. It’s powerful leverage in plea negotiations. Defendants will plead guilty to higher fraud amounts or fewer cooperation credits to avoid the mandatory consecutive sentence.

Why Spodek Law Group

At Spodek Law Group, we’ve defended hundreds of federal fraud cases involving identity theft allegations. We know how to negotiate with prosecutors to avoid §1028A charges before indictment. We know how to structure cooperation agreements that lead to §3553(e) motions.

Todd Spodek is a second-generation criminal defense attorney with decades of experience in complex federal cases. Our team includes former federal prosecutors who understand how DOJ evaluates identity theft charges and what it takes to get them dropped or reduced.

If you’re under investigation for EIDL or PPP fraud and identity theft is involved, contact us immediately. Once you’re indicted with §1028A charges, your options narrow dramatically. Early intervention – before the grand jury indicts you – gives us the best chance to keep aggravated identity theft charges off the indictment entirely.