sacramento ppp loan fraud lawyers

Thanks for visiting Federal Lawyers, a second-generation criminal defense firm managed by our lead attorney – with over 50 years combined experience defending federal fraud prosecutions nationwide. If you’re facing PPP loan fraud charges in Sacramento, you’re dealing with federal prosecutors from the Eastern District of California who handle pandemic fraud cases at the Robert T. Matsui U.S. Courthouse on I Street in downtown Sacramento. These prosecutors have charged business owners throughout the capital region – including Elk Grove, Roseville, Folsom, Davis, and surrounding Sacramento County communities – with bank fraud, wire fraud, and false statements for allegedly inflating payroll figures, misrepresenting employee counts, using proceeds for unauthorized purposes, or submitting applications through multiple entities prosecutors claim were shells created to multiply loan amounts. What makes Sacramento cases particularly aggressive is that Eastern District prosecutors have made pandemic fraud a major enforcement priority, treating small business owners like sophisticated fraudsters even when errors were made under economic pressure during unprecedented crisis, with prosecutors routinely seeking harsh sentences that treat desperate pandemic decisions as criminal schemes.

PPP Fraud Enforcement in Sacramento

The Eastern District of California, headquartered in Sacramento, has been among the most active federal districts in prosecuting PPP fraud. Prosecutors have announced dozens of cases involving business owners from throughout Northern California who allegedly obtained loans fraudulently. One Sacramento case that drew media attention involved a business owner charged with obtaining $1.5 million across multiple entities – prosecutors argued the companies were shells with no legitimate operations and overlapping employees, while defense claimed they were separately managed businesses with distinct operations entitled to individual loans. After conviction, the court imposed an 8-year sentence, signaling how seriously Sacramento federal judges treat these cases.

Sacramento prosecutors have also pursued EIDL fraud cases aggressively, particularly those involving identity theft where defendants allegedly used stolen information to submit multiple applications. These cases frequently result in aggravated identity theft charges under 18 U.S.C. § 1028A, carrying mandatory consecutive 2-year sentences that must run after any sentence imposed on underlying fraud charges. Even defendants with no criminal history face significant prison time when identity theft enhancements are added.

Federal Charges in Sacramento Cases

Bank fraud under 18 U.S.C. § 1344 is the most serious charge in PPP cases, carrying up to 30 years in federal prison. This statute applies whenever you allegedly made false statements to obtain funds from financial institutions, which includes PPP loans since banks administered the program on behalf of SBA. Sacramento prosecutors use this statute aggressively, arguing that any material misstatement on loan applications constitutes bank fraud regardless of whether you intended to use proceeds legitimately or planned to repay loans.

Wire fraud charges under 18 U.S.C. § 1343 get stacked on top when you used electronic communications during the application or funding process: submitting online applications, emailing documents to lenders, receiving wire transfers. Each electronic communication can be charged as a separate count. We’ve seen Sacramento prosecutors charge 12-20 wire fraud counts for single loan applications, creating theoretical exposure of 240-400 years to pressure defendants into guilty pleas rather than trials.

Conspiracy and Money Laundering

In cases involving multiple defendants or complex schemes, prosecutors add conspiracy charges under 18 U.S.C. § 371, which makes all conspirators responsible for the entire amount of fraud committed by any member. Money laundering charges under 18 U.S.C. § 1956 get added when prosecutors claim your spending patterns demonstrate you knew funds were obtained fraudulently – purchasing vehicles, making large cash withdrawals, or transferring funds in ways prosecutors frame as evidence of criminal intent.

DEFENSE TEAM SPOTLIGHT

Todd Spodek

Lead Attorney & Founder

Featured on Netflix's "Inventing Anna," Todd Spodek brings decades of high-stakes criminal defense experience. His aggressive approach has secured dismissals and acquittals in cases others deemed unwinnable.

NY Bar Admitted Multi-State Licensed Federal Courts

Meet the Full Team

Legal Scenario: What Would You Do?

Scenario

You received a PPP loan for your Sacramento restaurant through a local lender, and now a federal agent from the SBA Office of Inspector General has contacted you saying your reported employee count doesn't match state payroll records filed with the EDD. Your accountant just told you that the loan application listed 35 employees when your actual W-2 filings only show 12.

Can I still fix this with the SBA, or am I already facing criminal charges in the Eastern District of California?

Attorney's Answer

Once the SBA-OIG is investigating discrepancies between your PPP application and EDD payroll records, you are likely past the point of a simple administrative correction and need to assume criminal exposure under 18 U.S.C. § 1014 for false statements to a financial institution and 18 U.S.C. § 1343 for wire fraud. Federal prosecutors in the Eastern District of California have been aggressively pursuing PPP fraud cases, and inflating employee counts by that margin is exactly the pattern they target. However, early cooperation through a proffer agreement and voluntary repayment of fraudulently obtained funds can significantly influence whether prosecutors pursue charges or offer a pre-indictment resolution. You should not speak with investigators again without counsel present, as anything you say now can be used to establish the intent element that the government needs to prove.

This is general information only. Contact us for advice specific to your situation.

Building Effective Defenses

The strongest defenses challenge intent and materiality. Prosecutors must prove you knowingly made false statements – not that you made good-faith errors or relied on incorrect advice from accountants. We build intent defenses by presenting evidence that you consulted professionals before applying, that you relied on their calculations and recommendations, that you made reasonable interpretations of SBA guidance that was genuinely ambiguous during rapid program implementation in early 2020.