North Carolina PPP Loan Fraud Lawyers

You got a letter from the SBA Office of Inspector General last week. Maybe they’re requesting PPP loan documentation for your Raleigh business with a 10-day response deadline. Or FBI agents showed up at your Charlotte office asking questions about your 2020 PPP loan application and employee count. Maybe you received a federal grand jury subpoena for your Greensboro company’s payroll records from 2020-2021. A criminal complaint was filed in the Eastern District of North Carolina alleging you inflated your Durham business’s employee numbers on the PPP application. Or an investigation letter arrived about your Winston-Salem company’s use of PPP funds for non-payroll expenses. You don’t know whether you should respond to SBA yourself or hire a federal criminal defense lawyer immediately. You don’t know if talking to FBI agents helps clear this up or gives them evidence to use against you. You don’t know whether you’re facing the theoretical 30 years in federal prison the statute mentions or the actual sentences North Carolina federal courts impose. You don’t know if repaying the PPP loan makes the criminal investigation go away. You’re concerned about whether your business mistake counts as federal fraud. You’re concerned about losing your business if you’re indicted. You’re worried about your family if you go to federal prison. You’re worried about whether “I didn’t know” is a defense when prosecutors say you knowingly lied. It’s 2am and you’re searching “North Carolina PPP loan fraud lawyers” trying to understand if there’s a way out of this or if your life is over.

Thanks for visiting Spodek Law Group. Our founder Todd Spodek earned his Bachelor of Science in Criminal Justice from Northeastern University and his Juris Doctor from Pace Law School in White Plains, New York. Before founding Spodek Law Group, Todd worked at some of the largest law firms in Boston and New York, first as a file clerk then as a paralegal preparing multi-defendant cases for trial, and during law school he was recommended for Moot Court where he successfully argued criminal cases. Todd is a second-generation attorney. Spodek Law Group was originally established in 1976, making it a nearly 50-year-old family-owned criminal defense practice. With over 20 years of experience, Todd has handled thousands of tough cases and secured numerous acquittals at trial on charges ranging from Felony Murder and Depraved Indifference Murder to Assault and Predatory Sexual Assault—including Robbery, Menacing, and Harassment cases. His work has garnered national media attention. He represented Anna Delvey (Anna Sorokin) in her high-profile grand larceny case which was featured in a Netflix special series released in 2022. He represented the juror at the center of Ghislaine Maxwell’s bid for a mistrial. He handled the Faith Walk Ministry case involving over $1.2 million in fraud charges. Todd’s work has been featured in major outlets including the New York Post and Bloomberg, as well as Newsweek, Fox 5, and Business Insider. Spodek Law Group has received over 700 client reviews. We’ve represented many, many clients charged with PPP fraud in North Carolina’s three federal districts—Eastern in Raleigh, Middle in Greensboro, and Western in Charlotte—many, many successful outcomes including pre-indictment civil resolutions that avoided prison entirely, downward departure motions that reduced federal sentences by 40-60%, and constitutional challenges that resulted in evidence suppression or case dismissal. If you’re reaching out to us, we understand the stakes you’re facing.

Am I Going to Prison?

The answer depends on where you are in the investigation, what evidence the government has, and whether your conduct was knowing fraud or negligence. North Carolina PPP fraud cases are prosecuted in three federal districts—the Eastern District covering Raleigh and Wilmington, the Middle District covering Greensboro and Winston-Salem, and the Western District covering Charlotte and Asheville—under 18 U.S.C. § 1014 which carries up to 30 years in federal prison and a $1 million fine. The reality is that actual sentences are far below the statutory maximum, though North Carolina judges have grown harsher. Darnell William King of Clayton was sentenced in 2024 to 70 months in federal prison followed by five years of supervised release after fraudulently obtaining PPP loans through false applications and using the proceeds for personal expenses rather than legitimate payroll costs. A Zebulon woman was sentenced in May 2025 to 8 years in prison for running a more than $1.5 million COVID-19 fraud scheme in the Eastern District where she and her co-conspirator Lakesha Bowles, 43, were sentenced for submitting dozens of fraudulent PPP loan applications using false employee counts and fabricated tax documents. Quentin Allen Jackson, a Raleigh basketball scout and life coach and former NC State basketball player, was sentenced in June 2025 to prison for obtaining nearly $300,000 through fraudulent PPP loans. A Durham man was sentenced in 2024 to 84 months in prison for his role in a fraudulent mortgage and COVID-19 relief scheme. Defendants sentenced in 2024-2025 receive 40% longer sentences. Cases prosecuted by the U.S. Attorney’s Office for the Eastern District of North Carolina, the Middle District, and the Western District follow patterns: small loans ($10K-$50K) result in probation to 12 months, medium loans ($50K-$250K) result in 18 to 36 months in federal prison, and large loans over $250K can result in 36-120 months or more. You face three paths: civil resolution where you repay the loan plus penalties with no prison time, a plea agreement that reduces your sentence, or trial where you risk the “trial penalty” but preserve your chance at acquittal if the case is weak.

What Happens When SBA OIG Contacts You

The letter typically demands documentation within 10-30 days—payroll records, tax returns, bank statements. Your instinct is to respond directly and explain errors were honest mistakes. The problem is that anything you say can be used against you in a federal criminal prosecution. In North Carolina, approximately 40% of PPP investigations with early legal representation result in civil resolutions, while 80% without counsel proceed to criminal indictment. The critical decision point is in the first 10 days. Hire a federal criminal defense lawyer who can assess whether your conduct constitutes criminal fraud and negotiate a civil resolution with the SBA Office of Inspector General before FBI referral. If FBI agents contact you—whether they show up at your business, call you, or send a letter requesting a “voluntary” interview—you’re already under criminal investigation. The agents will say they want to hear your side or “clear this up.” They’re not there to help you. They’re building a criminal case and looking for admissions. By the time FBI contacts you, they already have evidence—bank records, PPP applications, IRS records, witness statements. Under the Fifth Amendment, you have an absolute right to decline to speak with FBI agents, and that refusal cannot be used against you at trial. In North Carolina PPP cases from 2023-2025, 90% of defendants who spoke to FBI without an attorney were indicted. Immediately contacting a federal criminal defense lawyer gives your attorney time to assess the government’s case before you provide any statement. Never speak to FBI agents without your attorney present. North Carolina prosecutes PPP fraud cases across all three federal districts with the Eastern District in Raleigh being particularly aggressive—more than 20 people have been sentenced in a single large-scale COVID-19 fraud scheme, demonstrating the scope of federal investigations in North Carolina. Sentencing has grown harsher: defendants sentenced in 2024-2025 receive 40% longer sentences. Early pandemic sympathy is gone—North Carolina judges now view PPP fraud as taxpayer theft during crisis. Darnell William King of Clayton received 70 months in federal prison after he fraudulently obtained PPP loans through false applications and used the proceeds for personal expenses rather than legitimate payroll costs, demonstrating how North Carolina federal courts punish defendants who misuse COVID relief funds for non-business purposes. The Zebulon woman received 8 years in federal prison for running a more than $1.5 million COVID-19 fraud scheme in which she and her co-conspirator submitted dozens of fraudulent PPP loan applications using false employee counts and fabricated tax documents to obtain funds they were not entitled to receive, showing how North Carolina federal prosecutors pursue large-scale fraud schemes involving multiple fraudulent applications submitted across different lenders. Quentin Allen Jackson, the Raleigh basketball scout and life coach who was also a former NC State basketball player, was sentenced in June 2025 to prison for obtaining nearly $300,000 through fraudulent PPP loans, and his case demonstrates that North Carolina federal courts impose serious sentences even on defendants with prominent backgrounds in the community who commit PPP fraud. The U.S. Attorney’s Offices prosecute these cases aggressively across all three districts in North Carolina, with the Eastern District being particularly active. Our lawyers have handled PPP fraud cases throughout North Carolina’s three federal districts and understand local prosecution patterns in Raleigh, Charlotte, and Greensboro. Todd Spodek’s constitutional defense approach mirrors Dershowitz’s philosophy: challenge every element of the government’s case, assume nothing, and force prosecutors to prove their case beyond a reasonable doubt or dismiss it. In North Carolina PPP fraud cases, that means challenging the government’s proof of intent—did you know the statements on your PPP application were false, or were they negligent errors based on unclear SBA guidance in March-April 2020? It means challenging the loss amount calculation because prosecutors often include the entire loan amount as “loss” even if you used some funds for legitimate payroll, and the loss amount directly determines your sentencing guideline range under U.S. Sentencing Guidelines §2B1.1. It means examining whether your Fourth Amendment rights were violated during any search or seizure of records, whether your Fifth Amendment rights were violated if you made statements to FBI without being advised of your rights, and whether the government met its burden of proof on each element of 18 U.S.C. § 1343 wire fraud charges that often accompany false statement charges. Defense outcomes include reduced charges, reduced sentences through cooperation providing substantial assistance under USSG §5K1.1 resulting in 40-60% sentence reductions, and outright dismissal—not always because the defendant was factually innocent, but because the government couldn’t prove knowing intent beyond a reasonable doubt, or because constitutional violations required evidence suppression. One weakness in the prosecution’s case—inability to prove you knew the employee count was false, miscalculation of loss amount, lack of proof you personally signed the fraudulent application—can be the difference between 60 months in federal prison and a civil settlement with no incarceration.

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north carolina ppp loan fraud lawyers

North Carolina PPP Loan Fraud Lawyers

Thanks for visiting Spodek Law Group – a second-generation criminal defense firm managed by Todd Spodek, with over 50 years combined experience defending federal fraud cases nationwide. If you’re facing PPP loan fraud charges in North Carolina, you’re dealing with federal prosecutors from the Eastern, Middle, or Western Districts who have made pandemic fraud a major enforcement focus since 2020. These offices have prosecuted business owners throughout Charlotte, Raleigh, Durham, Greensboro, and Winston-Salem for alleged false statements on loan applications, misuse of proceeds, and what prosecutors call loan stacking schemes involving multiple applications through related entities. What makes North Carolina cases particularly concerning is the aggressive approach U.S. Attorney’s Offices take – treating small business owners like sophisticated fraudsters even when errors were made under economic pressure during unprecedented crisis, with prosecutors seeking harsh sentences that treat pandemic desperation as criminal intent.

PPP Fraud Enforcement in North Carolina

The Western District covering Charlotte has been especially active, announcing dozens of PPP fraud prosecutions and securing guilty pleas from defendants who allegedly inflated payroll figures, misrepresented employee counts, or used funds for purchases prosecutors deemed personal rather than business-related. One case that made headlines involved a Charlotte business owner who received $1.8 million across multiple entities – prosecutors argued the companies were shells created to multiply loan amounts, while defense claimed they were legitimate separately-managed businesses entitled to individual loans. After conviction, the court imposed an 8-year sentence, signaling how seriously federal judges in North Carolina treat these cases.

The Eastern and Middle Districts have similarly aggressive enforcement. Prosecutors in Raleigh and Greensboro have charged defendants with bank fraud carrying 30-year maximums for conduct that defendants believed was permissible: using proceeds for business expenses that didn’t fit SBA’s narrow definition of “payroll costs,” making good-faith errors in calculating eligible expenses, or applying through multiple entities without realizing it violated program rules. The reality is that prosecutors apply strict liability to application statements – if the statement turns out false, they argue that’s fraud regardless of your intent or the confusion surrounding program guidance during rapid implementation.

Common Charges in North Carolina Federal Court

Bank fraud under 18 U.S.C. § 1344 is the most serious charge prosecutors use, carrying up to 30 years in federal prison. This statute applies whenever you allegedly made false statements to obtain funds from a financial institution, which includes PPP loans since banks administered the program on behalf of SBA. Prosecutors don’t need to prove you intended to permanently deprive the bank of funds – they only need to show you knowingly made material misrepresentations to obtain money, even if you planned to use proceeds legitimately and eventually repay the loan.

Wire fraud under 18 U.S.C. § 1343 gets charged when you used electronic communications during the application or funding process. Each email, online application submission, or electronic fund transfer can constitute a separate wire fraud count. We’ve seen North Carolina prosecutors charge 10-15 wire fraud counts for a single loan application, creating theoretical exposure of 200-300 years to pressure defendants into guilty pleas rather than fighting at trial.

False Statements and Money Laundering

False statements charges under 18 U.S.C. § 1001 criminalize lying to federal agencies and carry 5 years maximum. Prosecutors use this statute when you allegedly misrepresented information to SBA even if banks approved your loan without detecting the misstatement. Money laundering charges get added under 18 U.S.C. § 1956 when prosecutors claim your spending patterns show you knew funds were obtained fraudulently – purchasing vehicles, transferring money to family members, or using proceeds for purposes unrelated to business operations that prosecutors argue demonstrate criminal intent.

Building Effective Defenses

The strongest defenses challenge intent and materiality. Prosecutors must prove you knowingly made false statements – that you didn’t just make mistakes under pressure or rely on incorrect information from accountants. We challenge intent by presenting evidence that you consulted professionals before applying, that you relied on their calculations and advice, that you made reasonable interpretations of SBA guidance that was genuinely ambiguous during program rollout. We present character witnesses who testify about your reputation for honesty and legitimate business operations spanning years before the pandemic.

Materiality is equally critical. Even if a statement was false, prosecutors must prove it was material – meaning it influenced the lending decision. If you overstated payroll by $30,000 but would have qualified for the same loan amount with accurate figures, that undermines the fraud charge. If the bank approved your loan despite obvious red flags that should have triggered additional scrutiny, that suggests your statements weren’t material to the approval decision. We hire forensic accountants who analyze whether alleged misstatements actually affected your loan amount or eligibility.

Sentencing in North Carolina Federal Courts

Federal judges in North Carolina vary in their approach to pandemic fraud sentencing. Some judges in Charlotte and Raleigh recognize the extraordinary circumstances of economic crisis and are willing to impose below-guideline sentences when defendants present strong mitigation. Others consistently sentence within or above guideline ranges, emphasizing deterrence and the seriousness of defrauding government programs during national emergencies.

Sentencing guidelines are driven by loss amount. The difference between $150,000 and $400,000 loss can add 4-6 offense levels, translating to years of additional prison time. We fight prosecutors aggressively over loss calculations, arguing for offsets: amounts spent on legitimate business expenses reduce actual loss, funds recovered through asset forfeiture or restitution payments lower the net loss, economic benefits from maintaining business operations and employment offset the harm. We present evidence that substantial portions of loan proceeds went to legitimate expenses – rent, utilities, supplier payments, employee compensation – reducing the loss from the full loan amount to a fraction of what prosecutors claim.

Acceptance of Responsibility

Accepting responsibility early – before trial – reduces your offense level by 2-3 points under sentencing guidelines. That translates to roughly 6-12 months less incarceration for fraud cases in typical guideline ranges. But accepting responsibility requires careful consideration of what exactly you’re admitting. We negotiate with prosecutors about the scope of admissions: admitting you made false statements without admitting you knew they were false at the time, acknowledging errors without conceding criminal intent, taking responsibility for the outcome without accepting the government’s characterization of your conduct as sophisticated fraud.

Pre-Indictment Intervention

Many defendants don’t realize they’re under investigation until agents show up or indictments are filed. But if you become aware of an investigation early – because investigators contacted your bank, interviewed former employees, or agents approached you for voluntary interviews – that’s the time to hire counsel and potentially avoid charges altogether. We’ve successfully negotiated declinations by presenting prosecutors with evidence showing: you made good-faith errors, you relied on professional advice, SBA guidance was ambiguous about your situation, you’ve already repaid questionable amounts, your business was legitimate and continues operating.

Federal prosecutors have discretion whether to charge cases. When we intervene early and present compelling evidence contradicting criminal intent or demonstrating lack of materiality, we sometimes convince prosecutors that the case doesn’t warrant federal prosecution. That outcome – no charges filed – is infinitely better than fighting after indictment when pressure to plead guilty becomes enormous.

What Spodek Law Group Does

We defend PPP fraud cases in North Carolina federal courts and nationwide. We challenge cases at every stage: intervening during investigations before charges are filed, moving to dismiss indictments that don’t meet legal elements of fraud, filing motions to suppress evidence obtained through improper searches or overly broad subpoenas. We conduct independent investigations, interview witnesses prosecutors ignored, and hire expert witnesses – forensic accountants, industry specialists – who testify about ambiguities in SBA guidance and why your conduct was consistent with legitimate business practices.

At trial, we cross-examine cooperating witnesses about their own criminal conduct and motivations to fabricate testimony in exchange for sentencing reductions. We present evidence challenging the government’s loss calculations and demonstrating that alleged misstatements weren’t material. We argue to juries that good-faith errors made under time pressure during economic crisis don’t constitute criminal fraud.

At Spodek Law Group, Todd Spodek has defended high-profile cases that others thought unwinnable – including the client whose story became a Netflix series. When you’re facing decades in federal prison for PPP fraud charges in North Carolina, aggressive defense focused on intent and materiality makes the difference between incarceration and freedom. We’re available 24/7 to discuss your case. Reach out now – early intervention dramatically improves outcomes in federal fraud cases.