FEDERAL CRIMINAL LAWYERS

Denver PPP Loan Fraud Lawyers: Federal Defense in the Strike Force Capital

Welcome to Spodek Law Group. Our goal is to give you the same quality of representation that we would want for our own families. If you’re reading this page, you probably just learned something disturbing – the federal government is investigating PPP loans, and somehow, the District of Colorado has your name. Maybe you live in Denver. Maybe you’ve never been to Colorado in your life. Either way, you’re now facing the possibility of federal prosecution in one of the most aggressive jurisdictions in the country for pandemic relief fraud.

Here’s what most people don’t understand about Colorado: it’s not just another federal district. It’s one of only five locations in the entire United States where the Department of Justice placed a COVID-19 Fraud Strike Force. That means dedicated prosecutors, data analysts, and federal agents whose only job is finding PPP fraud cases. They’re not waiting for tips. They’re actively hunting. They have specialized tools, specialized training, and a mandate from the Attorney General to bring cases.

The numbers tell the story with brutal clarity. Richard Nieto of Morrison, Colorado got 46 months in federal prison and $962,438 in restitution for submitting fraudulent PPP applications. Charles Lacona of Colorado Springs got 24 months and $549,274 after a jury found him guilty. Shambrica Washington was convicted on 31 separate counts for defrauding nearly half a million dollars. These aren’t abstractions or hypotheticals – they’re real people who made real mistakes with PPP applications, and they’re now serving real federal sentences in real federal prisons.

Why Colorado? The Jurisdiction Nobody Expects

Heres were things get genuinly strange. You might be sitting in Texas, Florida, or California right now wondering why a prosecutor in Denver would have any authority over your case whatsoever. The answer involves something most people never think about and most lawyers dont adequatly explain: bank routing.

When you applied for a PPP loan – wheather through a traditional bank, a fintech app, or an online lending platform – that application went through a specific financial institution. Many of those lenders, especialy the high-volume fintech platforms that processed millions of applications during the pandemic rush, used banks headquartered in Colorado. Your loan paperwork might list a Denver address you’ve never seen in a state youve never visited. You probably didn’t even notice it at the time.

That bank location creates federal jurisdiction. The wire transfer went through Colorado, which means the alleged wire fraud occurred in Colorado, which means the District of Colorado can prosecute your case. Dosent matter that you live somewhere else. Dosent matter that your business operates in another state. Dosent matter that you’ve never set foot in the Rocky Mountains. The money flowed through Denver, and now Denver owns your case.

OK so why does this matter beyond just inconvenience? Because the Strike Force prosecutors in Colorado are specifically trained and resourced to handle PPP fraud cases. There not general-purpose federal prosecutors juggling drug cases, immigration matters, and white collar crime all at once. There focus is pandemic relief fraud exclusively, and theyve developed systems and methodologies to identify and prosecute these cases with maximum efficiency.

The Strike Force announced in July 2023 that Colorado would be one of five national hubs. The other locations are Maryland, New Jersey, the Southern District of Florida, and a joint task force in California. Together these five locations handle the most significant PPP fraud prosecutions in the country. If your case gets assigned to Denver, your facing prosecutors who have seen hundreds of similar cases and know exactly how to build them.

The Algorithm Came Before the Investigator

Think about how you’ve probably always assumed federal investigations work. Someone reports suspicious activity. An agent reviews the complaint and decides if it merits attention. They open a case file. Evidence gets gathered through traditional investigative methods. A prosecutor eventually decides weather to charge.

Thats not how Strike Force cases actually work in practice.

The Department of Justice describes its approach as “prosecutor-led and data analyst-driven.” Translation: algorithms scan millions of PPP loan applications looking for patterns that suggest fraud. Red flags get automatically generated based on statistical anomalies. By the time a human prosecutor reviews your file, the computer has already flagged you as a potential target. You’ve been identified by software before any investigator made a judgment call about your case.

What triggers these algorithms? The common patterns include discrepancies that seem obvious in retrospect but were easy to miss when you were filling out applications under pressure:

• Employee counts that dont match other government records like unemployment filings or quarterly tax reports
• Revenue figures that seem inconsistent with prior tax filings or bank deposit patterns
• Multiple loan applications from the same physical address or IP address
• Business formation dates suspiciously close to PPP application dates
• Spending patterns after recieving funds that dont look like legitimate payroll expenses
• Unusual relationships between supposedly unrelated businesses

Heres the uncomfortable truth that nobody in the defense bar talks about publicaly. Alot of legitimate business owners triggered these red flags through honest mistakes made under extraordinary pressure. Maybe your accountant estimated payroll costs becuase you couldnt access exact records during lockdowns. Maybe you included contractors in employee counts becuase the guidance was confusing and changed repeatedly. Maybe your business had unusual circumstances – like a recent acquisition or restructuring – that made the numbers look suspicious on paper even though everything was legitimate.

The algorithm dosent know the difference between intentional fraud and genuine confusion. It just generates red flags based on statistical patterns. And once your flagged, your in the system – probly months or years before you have any idea an investigation even exists. The first indication might be a subpoena to your bank. Or agents interviewing your former employees. Or questions from your accountant about document requests they recieved.

Real Cases, Real Sentences: Understanding the Denver Math

Lets look at what actually happens to people convicted of PPP fraud in the District of Colorado. These are real cases from the Strike Force docket with real outcomes that illustrate the sentencing patterns:

Richard Nieto (Morrison, Colorado): Submitted three fraudulent PPP applications seeking $1.1 million total. Was successful in obtaining two loans totaling $913,551.88. Sentence: 46 months federal prison plus $962,438.85 in restitution.

Do the math on that. Thats roughly one month of federal prison for every $20,000 in fraudulent funds actually received. Not applied for – received. The sentencing calculation looks at what you actualy got, not what you attempted to get. Though attempted fraud carries its own exposure, the base offense level primarly depends on loss amount.

Charles Lacona (Colorado Springs): Inflated payroll costs and gross reciepts on applications. Submitted fabricated tax documents to make the numbers work. Recieved $513,732.50 in PPP loans. Made the decision to go to trial rather then accept a plea deal. Lost at trial – the jury convicted him on two counts of wire fraud and one count of money laundering. Sentence: 24 months federal prison plus $549,274.14 in restitution.

Lacona’s case demonstrates what happens when you fight and lose. The 24-month sentence for half a million dollars is actualy somewhat lighter then many similar cases nationwide – but going to trial and loosing almost always results in harsher treatment then pleading guilty would have. Prosecutors dont forget that you made them prove the case.

Shambrica Washington (formerly Colorado, now Texas): Operated a baby boutique business called Tiny Toes and Tiaras. Submitted applications with false employee counts and fabricated wages and revenues. Convicted on 31 separate counts for nearly $500,000 in fraud across both EIDL and PPP programs. Thirty-one counts. Not one charge, not three charges – thirty-one individual criminal counts that she now has to carry for the rest of her life.

Joseph Ronald Trenkle (Cherry Hills Village, Colorado → Puerto Rico): Charged in May 2025 with wire fraud and money laundering. Between April 2020 and February 2022, received nearly $5 million total – $2,999,995 in PPP funds and $1,850,000 in EIDL loans. The investigation took years. He apparently thought moving to Puerto Rico would provide some protection. It didnt.

Joshua and Magdalena Lybolt (Castle Rock): Indicted July 2024 for a $5 million scheme. The specific spending patterns matter here. According to the indictment, they used the money for a 2022 Porsche Taycan, a Range Rover, country club memberships, and real estate properties. Not payroll. Not business expenses. Luxury purchases.

Let that sink in. The feds didn’t just charge them with fraud. They documented exactly what they bought with the money – and thats going to be exhibit evidence at trial. Jury members will see photos of the Porsche while prosecutors explain that it was purchased with pandemic relief funds meant for employee paychecks.

The Couple Trap: When Spouses Get Charged Together

Something unusual keeps showing up in Colorado PPP fraud cases that deserves specific attention. Alot of them involve married couples charged together.

Joshua and Magdalena Lybolt – both charged. Ronald and Stace Yater Wallace – both indicted. Multiple other cases in the Denver docket where both spouses face federal charges arising from the same loan applications.

Heres what typicaly happens in these situations. One spouse handles the business operations day-to-day. The other spouse signs documents, maybe handles banking, maybe just provides information that goes into the application without fully understanding its significance. When the case gets charged, both spouses are on the hook – becuase federal conspiracy law dosent require you to be the mastermind of a scheme. You just have to knowingly participate in some material way.

The government loves these cases for strategic reasons that become clear when you think through the dynamics. When both spouses are charged, they cant easily support eachother through trial. There facing seperate legal exposure that creates divergent interests. There incentivized to cooperate against eachother to reduce there own sentences. The family unit that might have presented a united defensive front becomes a pressure point for prosecutors to exploit.

If your spouse had any involvement in your PPP application – signing anything, providing any financial information, having any awareness of the representations being made – they could be at risk to. This isnt paranoia or worst-case thinking. Its exactly what happened to the Lybolts, the Wallaces, and numerous others in similar circumstances.

$75 Million in Pending Cases – Are You One of Them?

The U.S. Attorney’s Office for the District of Colorado has publicly acknowledged in press statements that they are actively investigating “40 to 50” additional PPP and EIDL fraud cases worth an estimated $75 million in aggregate fraud amount. Thats not historical data from completed prosecutions. Thats the current pipeline of cases being actively worked right now.

Think carefully about what that means for your situation. If your facing questions about a PPP loan, if youve recieved a grand jury subpoena, if federal agents have contacted your bank or your accountant with document requests – you might already be one of those 40 to 50 cases. The investigation might be considerably further along then you realize. Targets of federal investigations are typicaly the last to know there being investigated.

The Strike Force model means cases move through the system with unusual efficency compared to traditional federal prosecution. Dedicated prosecutors working only pandemic fraud cases develop pattern recognition. Data analysts who specialize in financial forensics spot anomalies faster. Agent teams that have seen hundreds of similar cases know exactly what evidence to look for and were to find it.

This isnt a general federal court were prosecutors juggle drug trafficking cases, immigration violations, and white collar matters all at once with divided attention. The District of Colorado Strike Force is a specialized operation, and that specialization works against defendants who are used to thinking of federal prosecution as slow and overloaded.

What Makes Denver Federal Defense Different

Heres the part were our experience matters most. At Spodek Law Group, we understand that federal criminal defense in the District of Colorado – specificaly for PPP fraud cases – requires knowledge that most criminal defense lawyers simply dont have.

The sentancing guidelines for these cases follow predictable patterns based on loss amounts, role in offense, and cooperation factors. The charging decisions follow identifiable criteria that experienced practitioners can anticipate. The cooperation frameworks that might reduce exposure have specific requirements and timing considerations in this particular district. Attorneys who dont regularly handle these cases – even good attorneys with strong general practices – dont know these patterns.

Todd Spodek has built a practice focused on federal criminal defense at the highest level. Our team understands that your facing more then just criminal charges on paper – your facing the potential loss of everything youve built over years or decades, real prison time measured in years not months, massive restitution orders that can exceed the original loan amounts, and the permanent destruction of your profesional reputation and career prospects.

What we actualy offer clients facing these charges:

• Direct experience with federal PPP fraud prosecutions at the Strike Force level
• Understanding of the specific methodology and priorities that drive Strike Force decisions
• Knowledge of what triggers charging decisions versus declinations in borderline cases
• Relationships within the federal defense community that provide intelligence on how cases are being handled
• Resources to mount a genuine defense rather then simply negotiating terms of surrender
• Understanding of when cooperation makes sense and when it dosent

Every case is fundamentally different. Some clients are best served by early cooperation that can result in reduced charges or sentencing recommendations. Others have legitimate defenses that should be fought through motion practice or trial. Still others need to negotiate the best possible resolution before charges get formaly filed. We cant tell you which category your in until we understand the specifics of your situation through confidential consultation.

The 10-Year Window: You’re Not Safe Yet

Many people who recieved PPP loans back in 2020 assume there safe now. Its been five years. Wouldnt they have been charged already if the government was going to pursue them? Surely the statute of limitations has run or is about to run?

Wrong on all counts. In 2022, Congress passed the PPP and Bank Fraud Enforcement Harmonization Act, which extended the statute of limitations for PPP fraud from the standard 5 years to a full 10 years. That means PPP loans from 2020 can be charged until 2030. Loans from 2021 can be charged until 2031.

The Strike Force model exists precisely becuase the government knows it has time. They can work through cases metodicaly, building the strongest possible prosecutions with the most complete evidence packages, becuase there not racing against a five-year deadline anymore. They have until the end of the decade to charge applications from the initial PPP waves.

Joseph Ronald Trenkle, formerly of Cherry Hills Village, was just charged in May 2025 for loans recieved between 2020 and 2022. The investigation took years to develop. The charge came years after the underlying conduct. Thats the new normal for PPP fraud prosecution – patient, methodical case-building with no rush to indict.

If you received a PPP loan and your genuinely worried about the application, the next five years are not going to provide relief or certainty. Every time federal agents knock on someones door in a publicized case, every time a new indictment gets announced, every time a subpoena arrives at a bank or accounting firm – your going to wonder if your next on the list.

The Call You Need to Make

Federal criminal exposure for PPP fraud is among the most serious situations a business person can face. The sentances are measured in years, not months. The restitution orders frequently exceed the original loan amounts once interest and penalties are calculated. The collateral consequences – for your career, your family relationships, your future earning potential – are genuinely devastating in ways that are hard to fully appreciate until you’re living them.

The District of Colorado Strike Force has resources, expertise, and a specific mandate to prosecute these cases aggressively. If your on there radar, they have years remaining to build a case against you while you wait and wonder. Waiting to see what happens is actually the single worst possible strategy available to you.

Spodek Law Group provides federal criminal defense at the level these cases genuinely require. We dont handle traffic tickets and divorce cases on the side. Federal defense is what we do, and its all we do.

Call us at 212-300-5196 to discuss your situation. The consultation is entirely confidential. Attorney-client privilege protects everything you tell us from the moment of first contact. And the sooner we understand what your actually facing, the more options remain available for your defense.

The Strike Force is already working on there caseload. The question is weather you’ll have experienced federal defense counsel working just as hard for you.