Seattle PPP Loan Fraud Lawyers

Seattle PPP Loan Fraud Lawyers

Welcome to Spodek Law Group. Our goal is to give you real information about PPP loan fraud defense in Seattle and the Western District of Washington – not the sanitized version you find on other legal websites. If your reading this, your probably terrified. Maybe you took a PPP loan in 2020 when everything was falling apart. Maybe you stretched some numbers. Maybe you used the funds for things that werent exactly payroll. And now your lying awake at 3am wondering if federal agents are going to show up at your door.

Heres the thing nobody else will tell you: the government has until 2030 to prosecute you. Read that again. If you took a PPP loan in April 2020, federal prosecutors have until April 2030 to bring charges. Thats not a typo. Congress extended the statute of limitations to 10 years in August 2022. And its retroactive – meaning every loan thats already been issued falls under the new timeline. The relief you thought saved your business could still destroy your life.

Todd Spodek has handled federal fraud cases for years, and heres what he tells every client who walks through our door: by the time most people call a lawyer, the government has already been building their case for months. Sometimes years. The investigation doesnt start when they knock on your door. It starts when an algorithm flags your loan application because the numbers dont match your tax returns.

The 10-Year Clock Nobody Told You About

Heres were most people make a catastrophic mistake. They think the original 5-year statute of limitations still applies. They think because its 2025 and they got their loan in 2020, theyre almost safe. Wrong.

In August 2022, President Biden signed the PPP and Bank Fraud Enforcement Harmonization Act. This law extended the statute of limitations for PPP fraud from 5 years to 10 years. And it applies retroactively to every single loan thats already been issued. Your 2020 loan can be prosecuted through 2030. Your 2021 loan can be prosecuted through 2031.

But wait – it gets worse. Your forgiveness application has its own 10-year clock. If you submitted your forgiveness paperwork in 2022, that clock runs until 2032. Every document you signed created another potential charge with its own timeline.

The SBA Office of Inspector General has flagged over 70,000 loans for potential investigation. They have a decade to work through that list. The question isnt whether prosecutions will continue – theyre actively happening right now in Seattle. The question is whether your name is on that list.

At Spodek Law Group, we see clients who waited years thinking they were safe. By the time they call us, the investigation has been running for months. Dont make that mistake.

Seattle Tech Executives Are Perfect Targets

Heres something the other law firm websites wont tell you: if your a tech professional in Seattle, your basicaly the ideal PPP fraud target. The reasons are actualy pretty straightforward once you understand how federal investigators build cases.

Look at the Mukund Mohan case. He was a former director at both Amazon and Microsoft. Lived in Clyde Hill – one of the wealthiest neighborhoods in Washington. He submitted 8 fraudulent loan applications seeking over $5.5 million. He created fake tax filings and altered incorporation documents. He thought he was clever. He probly figured his sophistication would protect him.

He got 2 years in federal prison plus a $100,000 fine and $1.8 million in restitution. Let that sink in. A tech executive with resources and connections still ended up in federal prison.

Heres the hidden connection that makes Seattle tech especialy vulnerable: your company has incredible digital infrastructure. You use Gusto or Rippling or Zenefits for payroll. You have detailed HR records. You have contractor agreements in DocuSign. You have Slack messages and email threads about employee counts. You probly have project management tools showing who was actualy working and when.

The government can subpoena all of it. Every single system your company uses can be compeled to produce records. And when your PPP application says you had 50 employees but your payroll software shows you had 12, thats not a gray area. Thats a federal case waiting to happen.

Tech companies also tend to use fintech lenders like BlueVine, Kabbage, and Fundbox – lenders with detailed digital application records. Every field you filled out is timestamped and preserved. The IP address you submitted from is logged. The device you used is recorded. There is literaly nowhere to hide. Federal investigators love tech company cases becuase the evidence practially collects itself.

Your Forgiveness Approval Means Nothing

OK so you applied for forgiveness. You got approved. The loan is wiped. Your safe, right?

Thats the most dangerous assumption clients make when they come to Spodek Law Group. Your forgiveness approval is not immunity. Its not even close. Alot of people beleive that forgiveness equals case closed. Thats completly wrong.

Think about what happened. First, you submitted a PPP application certifying certain facts about your business, your employee count, your payroll. That was a sworn statement to a federaly backed lender. You signed it under penalty of perjury.

Then, months later, you submitted a forgiveness application. You certified – again – that you used the funds appropriatley. That you maintained employee counts. That the expenses were elegible. Another sworn statement. Another document with your signature on it.

If your numbers were wrong on both documents, prosecutors dont see a mistake. They see a pattern. They see someone who lied twice. The first application is wire fraud or bank fraud. The second is potentialy another count. Thats how the charge stacking works.

Paradise Williams got her PPP loans approved. She got her EIDL loans approved. She got her unemployment claims approved. She got forgiveness for basicaly everything. And then she got 5 years in federal prison. Her approval meant absolutly nothing when the investigators finaly caught up.

The government doesnt care what the SBA approved. The SBA was overwhelmed in 2020. They were procesing thousands of applications per day. They approved applications they never should have. The approval process was essentialy a rubber stamp. Now the investigators are going back and checking every single one.

What 70,000 Flagged Loans Tells You

The FBI estimates that $64 billion was stolen through PPP fraud. Let that sink in. Sixty-four billion dollars. Thats more than the annual GDP of some small countries. The government is definately not going to let that slide.

The SBA Office of Inspector General has flagged over 70,000 loans for potential investigation. As of December 2023, that oversight has resulted in aproximately 1,255 criminal indictments, 985 arrests, and 683 convictions. The COVID-19 Fraud Enforcement Task Force has charged more than 3,500 defendants with federal crimes and recovered over $1.4 billion.

Those arent just numbers. Each one represents someone who thought they wouldnt get caught. Someone who thought their loan was too small to matter. Someone who thought the government had bigger fish to fry. They were all wrong.

Heres how the flagging system actualy works. The government has algorithims that cross-reference your PPP application with your tax returns. They compare your stated employee count to your Form 941 quarterly payroll tax filings. They check wheather your business was even registered at the address you listed. They look at your bank statements to see were the money actualy went.

If those numbers dont line up, your file gets flagged. The discrepency could be minor – maybe you said 15 employees but your tax records show 12. Or it could be major – you claimed $500,000 in payroll but your Form 941 shows $50,000. Either way, you end up in the queue.

And with 70,000+ flagged loans and a 10-year window to prosecute, theyre methodicaly working through everyone. This isnt speculation. This isnt a theory. Theyre actively prosecuting cases in the Western District of Washington right now. The question is just timing – when will they get to your file?

The Only Move That Actually Works

Heres the inversion that most people dont understand untill its too late: cooperating with the government AFTER they contact you is almost worthless. Cooperating BEFORE they contact you is everything.

Think about it from the prosecutors perspective. If the FBI knocks on your door and you start talking, what leverage do you have? None. They already have evidence. They already have subpeonas out. They already know what they know. Your “cooperation” at that point is just confirmation of what theyve already figured out. Its basicaly useless.

But if you come forward proactively – before any contact, before any investigation you know about – the calculus changes completly. You have something to offer that they dont already have. You can demonstrate good faith. You can potentialy shape the outcome.

Voluntary disclosure through experienced federal defense counsel can potentialy convert criminal exposure into a civil matter. Instead of wire fraud charges and prison time, you might be looking at repaying the loan plus penalties and interest. Thats still expensive and painful, but its not a federal conviction on your permanant record. Its not prison. Its not the destruction of your career and your family.

Todd Spodek always explains it this way: you have one chance to get in front of this. Once the government makes contact, that window closes permanantly. Every day you wait is a day closer to losing your only real leverage. Clients who come to us early have options. Clients who come to us after the FBI visit have far fewer.

This is why Spodek Law Group exists – to help clients make this decision before its made for them. We cant guarantee outcomes, but we can guarentee that early action creates possibilities that simply dont exist later.

What Happens When They Actually Charge You

Lets talk about what your actualy facing if charges come. Federal PPP fraud typicaly involves some combination of these charges:

Wire Fraud (18 U.S.C. § 1343): Up to 20 years per count. This is the workhorse charge. Every electronic communication related to the fraud is a potential count. That email you sent to your lender? Thats a count. The online application you submitted? Another count. The charges can stack rapidley.

Bank Fraud (18 U.S.C. § 1344): Up to 30 years per count. If your loan came through a traditional bank rather than a fintech lender. This is actualy the more serious charge becuase of the longer maximum sentence.

Money Laundering (18 U.S.C. § 1956): Up to 20 years per count. If you moved the money around after recieving it. Bought a car? Transfered funds to another account? Thats potentialy money laundering on top of the fraud charges.

False Statements (18 U.S.C. § 1014): Up to 30 years. For lying on the application. Every false statement is technicaly a seperate offense.

Conspiracy (18 U.S.C. § 371): Up to 5 years, but often stacked with other charges. If you had any help at all – an accountant who prepared documents, a friend who gave you information – prosecutors can add conspiracy.

Heres the reality of sentencing in the Western District of Washington. Mukund Mohan, the tech executive who attempted to steal $5.5 million, got 2 years. Paradise Williams, who led a $6.8 million fraud ring, got 5 years. Her co-defendants got 18 months to 3 years depending on their roles. These are real people from the Seattle area serving real time in federal prison right now.

The sentencing guidelines look at loss amount, number of victims, sophisticated means, role in the offense, and obstruction. A small business owner who inflated employee counts is looking at a very different sentence than someone who created dozens of fake businesses. But both are looking at federal convictions.

But heres what nobody tells you: 93% of federal defendants are convicted. Prosecutors dont bring cases they cant win. By the time you see an indictment, theyve already built an overwhelming case. Fighting it at trial means risking a trial penalty – a significantley longer sentence for making them prove it. Most defendants plead out becuase the alternative is worse.

Why Your “Small” Loan Is Still Dangerous

Theres a dangerous myth floating around that the government only prosecutes big cases. That your $50,000 loan is too small to matter. That they have bigger fish to fry.

Heres the irony: small cases are exactley what prosecutors love.

Think about it from their perspective. A small case is easy to investigate. The facts are simple. The documentation is limited. The defendant often has no resources for a serious legal fight. And the conviction is essentialy guaranteed.

More importantly, small cases make great press releases. “DOJ Cracks Down on PPP Fraud – No Amount Too Small to Prosecute.” That headline sends a message to everyone else: we’re coming for all of you.

The COVID-19 Fraud Enforcement Task Force has specificaly stated they are pursuing cases regardless of the fraud amount. They want to send a message that pandemic relief fraud will not be tolerated, period.

So if your sitting there thinking your $30,000 or $50,000 or $75,000 loan is too small to trigger an investigation – think again. Your “small” case might be exactly the one they choose to make an example.

The Western District of Washington Is Active

Let me be extremly clear about something: PPP fraud prosecutions are happening in Seattle right now. This isnt hypothetical. This isnt “someday they might get around to it.” The Western District of Washington has active cases.

Paradise Williams case was resolved in March 2024. Shes currently serving 5 years. Her co-defendants D’Arius Jackson (3 years), Tia Robinson (18 months), Rayvon Peterson, and David Martinez are serving or awaiting sentencing.

Mukund Mohan finished his sentence but still has the conviction on his record, along with $1.8 million in restitution. A former Amazon and Microsoft director – his tech career is permanantly damaged.

Three Seattle-area companies settled civil allegations for applying for and accepting PPP loans they werent qualified for. Thats the civil track – and those companies still had to pay significant penalties.

The message is clear: federal prosecutors in Seattle are actively pursuing these cases. They have resources. They have institutional focus. And they have 10 years to work through everyone whos flagged.

What To Do Right Now

If your reading this and your stomach is in knots, thats the appropriate reaction. The situation is serious. But its not hopeless – especialy if you act now. Every day matters. Every decision matters. What you do in the next 48 hours could determain your future.

Do NOT talk to federal agents without an attorney present. If the FBI or SBA OIG shows up at your door, you have the right to remain silent. Use it. Be polite but firm. Tell them you want to consult with an attorney before answering any questions. They may seem friendly. They may seem like they just want to “clear things up.” Dont fall for it. Anything you say will be used against you.

Do NOT destroy documents. This is obstruction of justice – a seperate federal crime. Keep everything. Your attorney needs to see it. Deleting emails, shredding paperwork, wiping hard drives – all of this creates additional charges and makes your situation dramaticaly worse.

Do NOT discuss this with anyone except your attorney. Not your business partner. Not your accountant. Not your spouse (unless they need to know for family planning purposes). Anyone you tell could be subpoenaed to testify against you. The only conversations that are protected are those with your attorney.

What you SHOULD do:

Call Spodek Law Group at 212-300-5196. We handle federal cases nationwide, including throughout Washington state. We offer confidential consultations where we can assess your exposure and discuss your options.

If you havent been contacted yet, you may be in a position for proactive voluntary disclosure. This is the best possible scenario – getting ahead of the investigation while you still have leverage.

If you HAVE been contacted, time is even more critical. Every conversation, every document request, every “casual question” from an agent is part of their case. You need representation immediately.

Todd Spodek built this firm on one principle: clients deserve the truth, even when its uncomfortable. The truth is that PPP fraud exposure is serious, the statute of limitations runs until 2030, and the government is activley prosecuting cases in Seattle.

But the truth is also that outcomes vary dramaticaly based on when you get legal help. Early intervention – especialy before government contact – creates options that simply dont exist later.

Dont wait until the knock on the door. The 10-year clock is running. Call us today before your options disappear.