Franklin County PPP Loan Fraud Lawyers

Franklin County PPP Loan Fraud Lawyers

Welcome to Spodek Law Group. We handle federal PPP loan fraud cases across Ohio, including Franklin County and the Southern District of Ohio. Our goal is to protect your rights, your freedom, and your future when federal prosecutors come calling about pandemic relief funds you recieved years ago.

If you took out a PPP loan in 2020 and thought you were safe by now, your wrong. The bank fraud statute extends through 2030. Federal prosecutors are activley filing new charges in 2025 for loans obtained five years ago. This isnt old news. This is your reality right now.

The Southern District of Ohio has become one of the most aggressive federal districts in the country for PPP fraud prosecutions. Columbus federal judges are handing down sentences that should terrify anyone who cut corners on their application. The pandemic is over. The sympathy is completley gone. Judges are sentancing people to years in federal prison for loans they got five years ago.

The Columbus Federal Courthouse Reality

Heres the thing about Franklin County PPP fraud cases that nobody tells you. The Southern District of Ohio handles these prosecutions with absolutley zero mercy. And the sentences coming out of Columbus right now are devastating.

In June 2025, Lorie Schaefer from Westerville was sentenced to 70 months in federal prison for her role in a $2.8 million PPP fraud scheme. Thats nearly six years behind bars. She claimed she was affiliated with Flying Pizza restaurants in the Dayton area to fraudulently obtain $1.9 million in PPP funds. She said she had 98 employees. She submitted altered bank records. None of it was true.

Let that sink in for a second. A woman from Westerville who claimed to have 98 employees at pizza restaurants she didnt own is now headed to federal prison for almost six years. She was also ordered to pay $2,312,805 in restitution – jointly with her co-defendant Latisha Holloway, who got $980,833 in fraud.

Heres the part that really gets me. What did Lorie Schaefer spend her PPP money on? She spent $26,000 on liposuction. She spent $10,000 on a “newborn baby gift.” She purchased and renovated a condo for over $900,000. Thats were your pandemic relief money went. And the government found out about all of it.

The restitution order is joint and several with her co-defendant. That means if Holloway cant pay, they come after Schaefer for the full amount. This isnt just a prison sentence. Its a financial death sentence that follows her for the rest of her life.

How They Actually Catch You

OK so heres something people dont realize about PPP fraud investigations. The government isnt randomly auditing loans. Theyre using data analytics, cross-referencing tax records, and following tips from people who know what you did. Theyve been building these cases for years. Methodicaly. Patiently. Waiting for the right moment to move.

In the Schaefer case, heres the paradox that should keep you up at night. She claimed affiliation with Flying Pizza restaurants to get her loan. When the SBA processed the application, they actually notified the real Flying Pizza owners about the loan request. The actual restaurant owners said they couldnt justify such a large loan – because they had no idea who Lorie Schaefer was. The government told the real business about the fake application. Thats how she got caught.

Think about that for a moment. If you used someone elses business name, claimed employees you didnt have, or submitted altered documents – the government has ways of verifying that information that you probly never considered. They contact the actual businesses. They cross-reference with the IRS. They look at your bank statements and compare them to what you claimed.

The SBA Office of Inspector General has been activley working with IRS Criminal Investigation and the FBI on these cases. They have access to everything. Banking records. Tax filings. Payroll data. Business registration documents. When your PPP application claims you had 98 employees making significant wages, and your 2019 tax return shows a completley different picture, that discrepency is automaticaly flagged.

The Family Fraud Pattern

March 2025 saw another major case that demonstrates how these prosecutions work. Ajay and Ruhi Chawla, a husband and wife team, pled guilty to wire fraud for obtaining over $900,000 in fraudulent PPP and EIDL loans. They filed four PPP loan applications and three EIDL loan applications using different trucking companies.

The businesses they used? Prime Transportation and Logistics Inc. ABC Trucking Inc. Apex Truck Lines LLC. A1 Diesel Truck Repair LLC. Four different companies. Seven different loan applications. All with false information about employee counts and gross revenues.

Heres the uncomfortable truth that should concern anyone who did something similar. The Chawla couple didnt create these companies to run legitimate businesses. They set up the infrastructure specificaly to file PPP applications. This wasnt an accident or a misunderstanding. It was systematicaly designed to exploit the program. And when you build that kind of infrastructure, the government can prove intent to defraud.

What did they use the money for? Not payroll. They bought real estate. Thats a permanant paper trail that prosecutors love. Thats the kind of spending pattern that federal investigators look for. PPP funds were supposed to keep workers employed. When the money goes to property purchases instead, prosecutors have an easy case to make.

Todd Spodek and our team have seen this pattern repeatedly across the country. People who created shell companies or used multiple business entities to file separate applications face significantley harsher prosecution then those who made mistakes on a single legitimate business application. The government treats systemic fraud differently then isolated errors.

The Small Cases Get Prosecuted Too

If your thinking “I only got a small loan, they wont bother with me” – your completley wrong. Kelton McClarrin from Cincinnati was sentenced to 18 months in federal prison for submitting a false PPP application. His fraud amount? Just $21,000.

Eighteen months in federal prison for twenty-one thousand dollars. Let that sink in.

Heres the irony that makes this case unforgettable. McClarrin used his PPP loan money for jail commissary services. He spent it on CashApp. Grubhub. DoorDash. Facebook purchases. Hotel rooms. He was already in trouble with the law when he got pandemic relief, used it for prison-related expenses and food delivery, and is now back in prison. The entire cycle is almost absurd when you think about it.

The government prosecutes small cases to send a message. They want people to understand that no amount is too small to pursue. And when you look at the return on investment for prosecutors – 18 months of incarceration for a case that probly took them a few weeks to put together – its an easy win for them.

Nii Tei from Cincinnati got 48 months for structuring financial transactions to evade reporting requirements. Herman Brunis from Cincinnati got 12 months and a day for conspiracy to commit wire fraud related to COVID relief. These are real people serving real time in federal prison for pandemic fraud convictions.

And heres the thing that most people dont understand. The government has essentialy unlimited resources to pursue these cases. They have dedicated task forces. They have computer systems that automaticaly flag suspicious applications. They have cooperation agreements with banks that require reporting of unusual activity. Your thinking you got away with it because you havnt heard anything? That dosent mean anything. Cases sit in the pipeline for years before prosecutors decide to move. Theyve been personaly tracking applications since 2020.

The Timeline Nobody Explains

Heres how these investigations actualy work in practice. The SBA Office of Inspector General identifies suspicious applications through computer algorithms and data cross-referencing. Maybe your loan amount dosent match your reported income. Maybe your business address is a residential home. Maybe you claimed multiple employees but your tax records show you as a sole proprietor.

They refer it to the Department of Justice. An Assistant U.S. Attorney in Columbus reviews the file. If theres enough evidence, they open a grand jury investigation. You wont know about any of this. Grand jury proceedings are completley secret.

The first sign your in trouble? FBI agents show up at your door. Or your bank sends you a letter saying your accounts been frozen. Or you get a target letter from the U.S. Attorneys Office. By then, the investigation has been running for months. Maybe years. The government has already interviewed witnesses, subpoenaed bank records, and analyzed your financial history.

Lorie Schaefer was indicted in March 2024. She pled guilty in July 2024. Then she tried to withdraw her guilty plea. Twice. The court denied both attempts. She was sentenced in June 2025. Once that plea goes in, theres almost no way out. She realized too late what she was facing and desperatley tried to undo it. It didnt work.

What Makes the Southern District Different

The Southern District of Ohio is extremley aggressive on financial crimes. They prosecute these cases with the same intensity they bring to drug trafficking and violent crime. They are relentlessley focused on pandemic fraud. Columbus has experienced federal prosecutors who have handled hundreds of pandemic fraud cases. They know every excuse. Theyve heard every explanation.

When Schaefer claimed 98 employees at Flying Pizza restaurants, prosecutors knew exactly how to verify that claim. They contacted the actual business. They pulled IRS records. They analyzed bank statements. The entire case fell apart in days. Her application was basicaly a gift-wrapped conviction for the government.

The evidence against her was so overwhelmeing that her only option was to plead guilty. And even then, she tried to take it back twice. Both motions were denied. Thats what happens when the paper trail is irrefutable.

Spodek Law Group has handled PPP fraud cases in multiple federal districts. What we see in Southern Ohio is a court system thats had enough. The pandemic is over. Judges are tired of sob stories. They want to send a message that will deter others from even thinking about filing false applications.

The Cooperation Question

Heres were it gets complicated. In the Schaefer case, her co-defendant Latisha Holloway was involved in the same $2.8 million scheme. When multiple people are involved in fraud, the government uses that leverage. The first person to cooperate gets the best deal. Everyone else gets hammered.

This happens constantley. Co-defendants who cooperate early get reduced sentences. Those who fight and lose get the maximum. But heres the trap – you cant cooperate your way out of a case if you dont have information the government actualy wants.

If your a small fish who got caught up in someone elses scheme, cooperation might be your best option. If your the one who organized everything, cooperation might not save you. Schaefer tried to withdraw her plea twice. That tells you she realized too late how bad her situation was. By then, there was nothing she could do.

The government wants people higher up the chain. They want information about other schemes they dont know about. They want testimony that will help convict others. If you cant provide that, your cooperation has limited value.

The Evidence Problem

Think the government needs your confession? They dont. Every PPP application was submitted electronicaly. Every bank transfer was recorded. Your tax returns from 2019 are already in IRS databases. If you claimed your business had 50 employees making significant wages but your 2019 Schedule C shows minimal revenue, thats a document. Thats evidence that proves the lie.

They dont need you to admit anything. They just need the paper trail. And that trail has been sitting in federal databases for five years, waiting for someone to look at it closley.

At Spodek Law Group, we’ve successfuly defended clients by attacking the governments evidence – showing that discrepancys had innocent explanations, that clients misunderstood the program requirements, that there was no intent to defraud. But that defense only works if you havent already made statements to federal agents that contradict your position. The moment you talk to the FBI without a lawyer, you create the evidence they need to convict you.

Sentencing Realities in Southern Ohio

Lets talk numbers. Federal sentencing guidelines for PPP fraud depend on the loss amount and various enhancements:

• Schaefer: $2.8 million scheme → 70 months
• Chawla couple: $900,000+ scheme → Sentencing pending
• McClarrin: $21,000 fraud → 18 months
• Tei: Structuring charges → 48 months
• Brunis: Conspiracy → 12 months and 1 day

The pattern is clear. Even small fraud amounts result in federal prison time. There is no threshold below which prosecutors decline to pursue charges. McClarrin got 18 months for $21,000. Thats almost a month of prison for every thousand dollars of fraud.

Enhancements can add years to your sentence. If you used sophistocated means – fake documents, shell companies, multiple applications – thats an enhancement. If you obstructed justice – lied to agents, destroyed documents – thats another enhancement. If you were an organizer or leader of a scheme involving others – thats even more time added.

The acceptance of responsibility reduction – three levels off your sentence – only applies if you plead guilty early. If you make the government prepare for trial and then plead guilty at the last minute, you dont get the full reduction. If you go to trial and lose, you get nothing.

What To Do If Your Under Investigation

First, stop talking. Dont call the bank to ask about your loan status. Dont email your accountant asking about the PPP application. Dont text your business partner about “that PPP thing we did.” Everything is discoverable in federal court.

Second, call a federal criminal defense attorney immediatly. Not a local criminal lawyer who handles DUIs and state charges. Not your business attorney who helped you file the application. Someone who has actualy defended PPP fraud cases in federal court and understands how these prosecutions work. Someone who knows the Columbus federal courthouse and the prosecutors who work there. Someone whos been through this before and knows what your facing.

Third, preserve documents but dont alter them. Deleting emails or shredding paperwork is obstruction of justice – a seperate federal crime that can add years to your sentence even if the underlying PPP fraud charge dosent stick.

At Spodek Law Group, our first step is always understanding were you stand. Are you a target, a subject, or a witness? Has a grand jury been convened? What evidence does the government likely have? Only after answering these questions can we develop a defense strategy that makes sense for your specific situation.

The Proactive Approach

Some clients come to us before any government contact. Maybe they realized their PPP application had errors after the fact. Maybe they used a preparer who they now suspect was fraudulent. Maybe they got a legitimate loan but spent it on unauthorized expenses instead of payroll.

In these situations, voluntary disclosure might be an option. Coming forward before your caught demonstates good faith to prosecutors. It dosent eliminate criminal exposure, but it can significantley reduce the consequences. Prosecutors look more favorably on someone who self-reports then someone who had to be investigated for years.

This is especialy important in Franklin County right now. The window for proactive resolution is definately closing. The Southern District is handling a massive volume of PPP cases. They literaly dont have enough prosecutors to handle all the referrals from the SBA OIG. If you can resolve your case quickly through early cooperation, prosecutors may be willing to recommend lower sentences to clear their dockets.

Why Federal Experience Matters

Heres something most people dont understand about federal court. Its completley different from state court in almost every way. The rules are different. The prosecutors are different. The judges are appointed for life and have enormous discretion in sentencing.

Todd Spodek has handled federal cases across multiple districts throughout the country. We understand how to navigate the Southern District of Ohio specificaly – the local rules, the judicial preferences, the prosecutor tendancies. We know what works here and what definatley dosent. This matters more then you might think. A defense strategy that works in New York might fail completley in Columbus.

When you call Spodek Law Group at 212-300-5196, your getting attorneys who have actualy stood in federal courtrooms defending clients against PPP fraud charges. We’ve seen what works and what dosent work in these cases. We know which arguments resonate with judges and which ones fall flat.

The Clock Is Ticking

Remember Lorie Schaefer from Westerville? Her indictment came in 2024 for loans she got in 2020. Four years later. The government is extremley patient when it comes to financial crimes. They build cases methodicaly and carefully. They wait until they have everything they need before they move.

If you got a PPP loan in 2020 and something wasnt right about it, you’ve been living with this hanging over you for five years now. Maybe nothing will happen. Or maybe an FBI agent shows up tommorrow morning.

The difference between those outcomes often comes down to what you do today. Your next move is absolutley critical. Waiting until your arrested is the worst possible strategy. By then, the government has already decided your guilty. They’ve already presented evidence to a grand jury. They’ve already gotten an indictment. Your options are dramaticaly limited.

Call us now. Lets figure out were you stand before the government does it for you.