El Paso PPP Loan Fraud Lawyers

El Paso PPP Loan Fraud Lawyers

You’re in El Paso thinking federal prosecutors are too busy with border cases to worry about pandemic loans from five years ago. Maybe you’re telling yourself that immigration enforcement, drug trafficking investigations, and cartel prosecutions take priority over small business owners who stretched the truth on a PPP application. The Western District of Texas has plenty to focus on that doesn’t involve you.

That assumption has a 286-month problem. That’s nearly 24 years in federal prison – the sentence Michael Fullerton just received for PPP fraud in this district. His wife got another 108 months. Combined, they’re serving more than 32 years for stealing pandemic relief funds.

Welcome to Spodek Law Group. Our goal is education first – helping you understand what the Western District of Texas actually looks like from the inside before you find out the hard way. Todd Spodek has defended clients in federal courts across the country, including individuals facing pandemic fraud charges who assumed the government was focused elsewhere. The government wasn’t focused elsewhere. It was building cases that end with sentences measured in decades.

286 Months – What the Western District Calls Justice

Heres the number that should terrify anyone who took a questionable PPP loan in El Paso or anywhere else the Western District covers: 286 months. Thats what Michael Fullerton got for PPP fraud. Not 28 months. Not 86 months. Two hundred and eighty-six months in federal prison.

Let that land for a moment. Thats 23 years and 10 months behind bars. For pandemic loan fraud. In a district some people assume is too busy with border enforcement to care about financial crimes.

The Fullertons – Michael and his wife Tiffany – submitted six fraudulent PPP applications totaling more than $3.5 million. They actualy recieved about $3 million before the scheme collapsed. What did they spend it on? They tried to start a marijuana business in Oklahoma. They bought a motor home. Luxury watches. A boat. While small businesses were closing and employees were being laid off because legitimate relief wasnt reaching them, the Fullertons were shopping for toys with stolen pandemic funds.

U.S. Attorney Jaime Esparza for the Western District of Texas was clear about the message: they “took advantage of a national emergency to enrich themselves.” The sentence was designed to make that message unmistakable. Michael got 286 months. Tiffany got 108 months. Together, their serving more than 32 years. The restitution order is $3,027,526.11 – every dollar they stole, plus interest, plus costs.

If you think the Western District goes easy on PPP fraud because of competing priorities, the Fullerton sentences should correct that assumption permanantly.

The Tax Preparer’s 156 Applications

Araceli Benitez ran an insurance and tax services company in El Paso. She also operated a home health services company. Her job was helping people navigate federal requirements – tax filings, business documentation, regulatory compliance. People trusted her with their most sensitive financial information.

Between April 2020 and December 2022, she allegedly submitted 156 fraudulent PPP loan applications. Not 15. Not 50. One hundred and fifty-six seperate applications totaling more than $2.3 million.

Heres how the scheme worked according to the indictment. Benitez ran advertisements on Spanish-language radio and social media. She attracted clients who might not fully understand what they were signing. She filed applications with false information – materially false statements about businesses, employees, payroll. And she did it 156 times.

She was arrested on March 7, 2025. The indictment had been filed in January. The charges are staggering: seven counts of wire fraud, eight counts of bank fraud, two counts of money laundering, one count of structuring transactions to evade reporting requirements, two counts of aggravated identity theft, and one count of false or fictitious claims. If convicted on everything, shes facing up to 30 years in federal prison.

But heres what should concern anyone in El Paso who used a questionable preparer or helped with someone elses application. Benitez has 156 clients whose applications she submitted. Every one of those people is a potential witness. Every one of them might be contacted by investigators. Every one of them has to decide whether to cooperate against her – or face their own exposure for signing applications that contained false information.

Heres the uncomfortable reality about preparer fraud. The person who signed the application is still responsible for whats in it. “I didnt know what she put down” is an explanation, not a defense. If your name is on a fraudulent application, your exposure exists regardless of who actually typed the lies.

If you used a preparer who advertised PPP services on Spanish radio or social media in El Paso, you should assume investigators have that preparer’s client list. The question is whether your name is on it.

The FBI Employee Who Gambled It Away

Christopher James Phillips was an FBI employee. Not a low-level contractor. An actual FBI employee with federal credentials and access to sensitive systems. He understood how federal investigations work. He knew what bank fraud charges look like. He saw what happens to people who lie to federal agencies.

He applied for a PPP loan anyway.

Phillips created a company called Phillips Global Realty LLC. He submitted a PPP application claiming two employees and an average monthly payroll of $15,000. The application went through – he recieved $37,500 in PPP funds on June 2, 2020.

Six days later, he wired $25,000 to a personal trading account. And then he lost every penny of it through trading activities. An FBI employee, using stolen pandemic relief funds to gamble in the markets.

He was indicted in January 2024 on wire fraud and money laundering charges. The sentence was relatively light compared to others in the district – three months of home confinement and five years of probation. He was ordered to pay $39,771 in restitution.

But heres what the Phillips case demonstrates for everyone in El Paso who thinks their position or connections might provide protection. An FBI employee used his federal credentials to apply for a fraudulent loan. His credentials didnt protect him. If anything, they made the case easier to prosecute – prosecutors could argue he should have known better than anyone what he was doing.

The same logic applies to anyone in a position of trust. Accountants. Lawyers. Bank employees. Government workers. Your expertise in the system doesnt create immunity. It creates aggravation at sentencing.

Heres what probly went through Phillips’s mind when he submitted that application. He knew the government was overwhelmed with millions of PPP applications. He knew the verification processes were minimal during the initial rush. He may have thought his FBI credentials would help if questions arose – that being a federal employee somehow provided informal protection. Every one of those assumptions was wrong. His position made the case against him easier to prove, not harder to bring.

The Couple Who Bought a Marijuana Dream

The Fullerton case deserves more attention because it shows exactly what happens when PPP money gets spent on things the government can trace.

Michael and Tiffany Fullerton submitted six fraudulent PPP applications. They claimed to operate businesses with employees and payroll. The applications were approved, and approximately $3 million flowed into accounts they controlled. Then they started spending.

The marijuana business idea was ambitious. They were going to use pandemic relief funds meant for employee payroll to launch a cannabis operation in Oklahoma. Think about the layers of fraud there – stealing federal money to start a business involving a substance that remains federally illegal.

But they didnt stop at the marijuana dream. They bought a motor home. Luxury watches. A boat. The kind of purchases that create paper trails. The kind of spending that investigators can trace, document, and present to a jury.

When the case concluded, Michael Fullerton pleaded guilty to 11 counts including bank fraud, wire fraud, and aggravated identity theft. The sentence – 286 months – reflected both the amount stolen and the brazenness of the spending. Tiffany got 108 months.

Heres the math that should concern anyone who spent PPP funds on personal items. Every dollar you spent creates evidence. Every purchase can be traced. Every asset you aquired with fraud proceeds can be forfeit. The motor home is gone. The boat is gone. The watches are gone. What remains is the restitution order and the decades in federal prison.

How the Western District Builds Cases

Let me explain how investigations actualy work in this district, because most people get the process completly wrong.

The Western District of Texas covers El Paso, San Antonio, Austin, Waco, and dozens of smaller communities. Every major population center in South Texas falls under this jurisdiction. The Task Force operating here combines FBI agents, IRS Criminal Investigation specialists, SBA Office of Inspector General investigators, and other federal resources. Their all looking at the same data from different angles.

When investigators opened the Benitez file, they didnt find one questionable application. They found 156. Every one of those applications is a seperate potential charge. Every false statement is additional evidence. Every client who signed a fraudulent application is a potential witness who might cooperate to reduce their own exposure.

Heres what most people dont understand about federal investigations. The subpoenas go to banks before anyone contacts you. Tax records get pulled without notification. Documents get collected from accountants, preparers, anyone who touched the money. By the time investigators reach out – if they ever do – the investigation is essentialy complete. Their not gathering information. Their confirming what they already know.

The interview, if one happens, isnt the beginning of the investigation. Its a test to see whether youll tell more lies that can be charged as additional federal crimes under 18 U.S.C. 1001. The agents already have your bank records. They already know where the money went. What they dont know is whether youll be honest about it – or whether youll add false statements charges to your existing exposure.

This is why the silence in El Paso isnt safety. Its the sound of an investigation reaching conclusions you wont like.

The agents working these cases in the Western District arent generalists who handle a little of everything. Their financial crimes specialists. Career federal law enforcement with decades of experience tracing money through shell companies and inflated payroll records. When they open your file, they already know what questions to ask. They already know where the inconsistencies are. The only question is whether youve prepared answers – or whether youll be improvising in the worst moment of your life.

The Border Reality

Theres a dangerous assumption people make in El Paso. They think the border focus – immigration cases, drug trafficking, cartel investigations – somehow crowds out attention for financial crimes. They tell themselves that federal prosecutors have bigger priorities than chasing PPP loans from five years ago.

The Benitez case proves otherwise. A tax preparer who targeted Spanish-speaking clients through radio advertisements just got arrested in March 2025. Shes facing 30 years. Her 156 clients are facing their own decisions about cooperation and exposure.

Heres the thing about border communities and federal prosecution. The same infrastructure that handles immigration and drug cases handles financial crimes. The FBI agents assigned to the El Paso office work both. The Assistant U.S. Attorneys rotate between case types. The capacity exists, and its being used.

If anything, the border location creates additional scrutiny rather than less. Transactions that cross international lines attract attention. Money movements that might go unnoticed in other districts get flagged here. The systems designed to catch drug money and human trafficking proceeds also catch PPP fraud.

The Fullertons werent operating at the border. They were in Georgetown. But they fell under the same Western District jurisdiction as El Paso. The same prosecutors. The same aggressive sentencing. The same message: pandemic fraud gets treated seriously regardless of what else is happening in the district.

Your Options in El Paso

If your reading this because you took a PPP loan in El Paso or anywhere in the Western District and your worried it wasnt entirely legitimate, you have three basic options. None of them are perfect. Each carries its own risks. But doing nothing – waiting and hoping – is almost certainley the worst strategy.

Option 1: Wait and hope. This is what most people do. You tell yourself 286-month sentences are for big cases, not yours. You hope your name never surfaces. Maybe it works out. But if it dosent – if that subpoena arrives or that agent calls – youll have wasted years you could have spent preparing. Youll be scrambling when you should be strategizing.

Option 2: Voluntary disclosure. In some cases, coming forward before your contacted can result in more favorable treatment. The DOJ has shown willingness to credit cooperation, including self-disclosure. Phillips got home confinement partly because he cooperated. But disclosure is risky. Your essentialy admitting wrongdoing the government might never have discovered.

Option 3: Get counsel now and prepare. Even if you dont do anything proactive, having a lawyer review your situation means youll be ready if something happens. Youll understand your exposure. Youll have thought through responses. A good federal defense attorney can look at your PPP application, compare it to eligibility requirements, and tell you honestly what your facing.

At Spodek Law Group, we handle federal criminal defense matters across the country, including the Western District of Texas. The consultation is protected by attorney-client privilege – nothing you tell us can be used against you. That means you can be completely honest about what happened without fear that your words will end up in a prosecutors file.

Heres what preparation actualy looks like. You gather every document related to your PPP application – the application itself, the supporting documentation you submitted, your actual financial records from 2019 and 2020. You compare what you said with what was true. You identify discrepancies. You think through whether those discrepancies have innocent explanations or whether they represent material misrepresentations.

If agents contact you, you know what to say: “I want to speak with my attorney before answering any questions.” You already have an attorney who knows your situation. Your not improvising in the worst moment of your life.

The difference between prepared defendants and unprepared defendants often determines the outcome. When agents show up at your door or call your office, the first hour shapes everything that follows. People who panic say things they cant take back. People who are prepared invoke their rights and call their lawyer. One path leads to additional charges. The other path keeps options open.

The Statute Runs Through 2031

Congress extended the statute of limitations for PPP fraud to ten years. That means a loan application from April 2020 can be prosecuted until April 2030. EIDL applications from 2021 can be prosecuted until 2031. The government has years left to build cases.

The Western District isnt slowing down. Benitez was just arrested in March 2025. The Fullerton sentences happened in 2024. Cases are still being investigated. Indictments are still being drafted. The next prosecution in El Paso could already be in final review.

Federal sentences are not like state sentences. There is no parole in the federal system. When Michael Fullerton got 286 months, he’ll serve at least 85% of that – 243 months minimum, more than 20 years. When his wife got 108 months, she’ll serve at least 92 months. The time is real.

And after the sentence, the consequences continue. Professional licenses get revoked. Security clearances get denied. Career opportunities disappear. A federal fraud conviction follows you on every background check for the rest of your life. In a border community where trust and credentials matter for employment, that conviction becomes a permanent barrier.

The silence you’ve been hearing isn’t protection. It’s just the part of the process where the investigation hasn’t reached you yet.

If your facing potential PPP fraud exposure in El Paso or anywhere in the Western District, the time to talk to a lawyer is now. Not after the FBI shows up. Not after you receive a target letter. While you still have options.

Call 212-300-5196 for a confidential consultation. The Western District is still working. The question is whether they’re working on your file.

Michael Fullerton is serving 286 months. His wife Tiffany is serving 108 months. They thought a marijuana dream and luxury watches were worth the risk. Araceli Benitez is facing 30 years with 156 former clients as potential witnesses against her. Christopher Phillips thought his FBI credentials would help – they didnt. All of them learned the same lesson the hard way. The silence in El Paso ends when it ends – and you dont get to choose the timing.