ppp loan fraud lawyers

Thanks for visiting Federal Lawyers, a second-generation criminal defense firm managed by our lead attorney, with over 50 years of combined experience defending federal fraud cases throughout the United States. PPP loan fraud prosecutions have exploded since 2020 – federal prosecutors are aggressively pursuing business owners who allegedly made false statements on Paycheck Protection Program applications, used funds for unauthorized purposes, or engaged in what the government calls “loan stacking” by obtaining multiple loans through different entities. What makes these cases particularly dangerous is that prosecutors dont need to prove you intended to defraud the government permanently – they only need to show you made material false statements or misrepresented information on your application, even if you planned to use the money legitimately or thought you were eligible. The penalties are severe: bank fraud carries up to 30 years in federal prison, wire fraud up to 20 years, and prosecutors routinely stack multiple charges for single loan applications, exposing defendants to decades of incarceration for conduct that business owners often believed was permissible or justified given the economic crisis.

What Constitutes PPP Loan Fraud

The federal government defines PPP fraud broadly, encompassing any false statement or misrepresentation made to obtain loan proceeds. This includes inflating the number of employees your business had, overstating payroll expenses, certifying your business was operational before February 15, 2020 when it wasnt, using a shell company or nominee to apply for loans, or claiming your business was eligible when you knew it didnt meet Small Business Administration requirements. Look, what’s particularly insidious about PPP fraud prosecutions is that the government applies strict liability to statements made on applications – they dont care if you relied on an accountant’s advice, if you made honest mistakes under time pressure when applying, or if economic uncertainty made it difficult to accurately project how you’d use the funds. If the statement on your application turns out to be false, prosecutors argue that’s fraud regardless of your intent or the circumstances surrounding the application.

Common Prosecution Theories

Prosecutors charge PPP fraud under multiple federal statutes, and they typically stack charges to maximize exposure and pressure defendants into guilty pleas. Bank fraud under 18 U.S.C. § 1344 is the most serious charge, carrying 30 years maximum and applying whenever you allegedly made false statements to obtain funds from a financial institution – which includes PPP loans since banks distributed the funds on behalf of SBA. Wire fraud under 18 U.S.C. § 1343 applies when you used electronic communications – emails, online applications, bank transfers – in furtherance of the alleged fraud. False statements under 18 U.S.C. § 1001 criminalize lying to federal agencies, and prosecutors use this statute when you allegedly misrepresented information to SBA even if the bank approved your loan. Money laundering charges get added when you spent PPP proceeds in ways prosecutors claim show you knew the funds were obtained fraudulently – buying luxury items, transferring money offshore, or using proceeds for purposes unrelated to business operations.

DEFENSE TEAM SPOTLIGHT

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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.

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Legal Scenario: What Would You Do?

Scenario

You received a PPP loan of $150,000 for your small restaurant in 2020, but your accountant inflated payroll numbers on the application to qualify for a larger amount than you were entitled to. Now you've received a target letter from the U.S. Attorney's Office stating you're under investigation for PPP loan fraud.

Can I really face federal prison time even though my accountant was the one who inflated the numbers on my PPP application?

Attorney's Answer

Yes, PPP loan fraud is prosecuted under 18 U.S.C. § 1343 (wire fraud) and 18 U.S.C. § 1014 (false statements to a financial institution), carrying penalties of up to 20 and 30 years respectively. The government does not need to prove you personally filled out the false information — under federal conspiracy law (18 U.S.C. § 371), you can be held responsible if you knew or should have known the application contained misrepresentations. However, a strong defense can argue lack of knowledge or intent, particularly if your accountant acted independently. An experienced federal defense attorney can negotiate with prosecutors early, potentially securing a favorable resolution before formal charges are filed.

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

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