Washington D.C. PPP Loan Fraud Lawyers

Washington D.C. PPP Loan Fraud Lawyers

You’re in Washington D.C. thinking your proximity to federal power somehow provides protection. Maybe you tell yourself that prosecutors are focused on real criminals – drug dealers and violent offenders – not government employees and respected organizations who stretched the truth on pandemic relief applications. Maybe you assume the U.S. Attorney’s Office has bigger priorities than chasing down PPP loans from five years ago.

That assumption is getting people indicted. People who should have known better. A former Homeland Security Commissioner. An active Metropolitan Police officer. Prestigious think tanks that analyze policy for a living. Six advocacy non-profits that just agreed to pay over $3 million in settlements.

Welcome to Spodek Law Group. Our goal is education first – helping you understand what federal prosecution looks like in the nation’s capital before you find out the hard way. Todd Spodek has represented clients in federal courts across the country, including individuals and organizations in Washington D.C. who assumed their positions would protect them. Their positions made them targets.

Where the Laws Are Written, Lawbreakers Still Get Caught

Heres the uncomfortable truth about Washington D.C.: the U.S. Attorney’s Office here doesnt go easy on defendants because their connected or prestigious. They prosecute harder. The reasoning is simple – if you work in government, if you run a think tank that studies federal programs, if you lead an advocacy organization that shapes policy, you should understand what the rules are. When you break them anyway, prosecutors see that as aggravating, not mitigating.

The cases coming out of D.C. federal court in 2024 and 2025 read like a whos who of people who should have known better. A woman who served as D.C. Homeland Security Commissioner – prosecuted. A Metropolitan Police Department officer – indicted. Policy research organizations – settling for double what they took. The pattern is clear: proximity to power provides no protection.

Think about what that means if your reading this in the District. You might work for a federal agency. You might run a non-profit that receives government funding. You might have connections that make you feel insulated from consequences. Every defendant in these D.C. cases probly felt the same way. Their all learning otherwise.

The federal conviction rate exceeds 90%. Nationally, 81% of defendants sentenced for pandemic relief fraud recieve prison time. Those numbers dont drop because you live in Georgetown or work on K Street. If anything, judges in D.C. have shown particular willingness to impose serious sentences on defendants who exploited programs designed to help struggling businesses.

The COVID-19 Fraud Enforcement Task Force has been running since 2021. Thats four years of investigations. Four years of subpoenas going to banks and accountants. Four years of building cases that are now hitting courtrooms. The defendants being sentenced in 2024 and 2025 submitted their applications in 2020 and 2021. The government isnt in a hurry. Their methodical. And by the time you hear from them, the investigation is essentialy complete.

The Homeland Security Commissioner’s BMW

Wendy Nicole Villatoro served as the D.C. Homeland Security Commissioner. She also worked for the U.S. Department of Agriculture. She was a government official with security clearances and access to sensitive information. She knew how federal programs worked.

Between March 2020 and August 2021, she submitted eight PPP loan applications and fifteen EIDL applications. All of them contained materially false statements. She claimed to operate legitimate businesses with employees and payroll. She didnt. She inflated employee counts, average monthly payroll, gross yearly revenue, and cost of goods sold. She tried to steal between $2.6 million and $5.5 million.

She actualy obtained $844,000. Not from one fraudulent application – from a pattern of lies across 23 seperate submissions to the federal government.

What did she spend the money on? Student loans. A BMW SUV. Luxury items. While actual small businesses were closing and laying off employees because they couldnt get relief funds, a Homeland Security Commissioner was driving a luxury vehicle paid for with pandemic money meant for payroll.

On February 28, 2025, she was sentenced to 15 months in federal prison. Thats more than a year behind bars for someone who held positions of public trust. Her career in government is over. Her reputation is destroyed. And she’ll carry a federal bank fraud conviction for the rest of her life.

If a former Homeland Security Commissioner couldnt get away with PPP fraud in D.C., what makes you think your position provides any protection?

The Police Officer Who Submitted a Fake Tax Return

Roberto Adams was a Metropolitan Police Department officer. Active duty. Sworn to enforce the law. He applied for a PPP loan of $18,345 – not a massive amount, but enough to trigger federal attention.

The problem with his application was specific and obvious. He submitted a 2019 Form 1040 Schedule C claiming business income. But according to IRS records, that form was never actualy filed. He fabricated a tax return and submitted it to a federal program. As a police officer.

Adams was indicted by a federal grand jury in the U.S. District Court for the District of Columbia. Hes facing bank fraud charges that carry up to 30 years in prison. His career in law enforcement is effectively over. The pension he was working toward is at risk. His freedom is uncertain.

Heres what should concern anyone reading this who works in law enforcement, government, or any position of public trust. The government dosent give you credit for your service when your charged with defrauding federal programs. If anything, prosecutors argue that your position should have made you more aware of the consequences. Judges often agree.

$18,345. Thats all it took to end Roberto Adams’s career and put his freedom at risk. The amount wasnt worth it. It never is.

Heres what probly happened in Adams’s mind when he submitted that application. He thought the government was overwhelmed with millions of PPP applications. He thought nobody would verify individual tax returns. He thought an $18,000 loan wasnt big enough to attract attention. He was a police officer – maybe he even thought his position would provide some informal protection if questions arose.

Every one of those assumptions was wrong. The SBA’s data matching systems cross-reference applications against IRS records. When his claimed Schedule C didnt match what the IRS actually had on file, the discrepancy created a referral. And once investigators started looking, they found exactly what he hoped they wouldnt find: a fabricated tax document submitted to obtain federal funds.

$31 Million in Stolen Identities

Elias Eldabbagh took a different approach to PPP fraud in Washington D.C. He didnt submit one or two fraudulent applications. He built an entire infrastructure of lies.

From July 2020 through May 2021, Eldabbagh used his company, Alias Systems LLC, to submit at least 25 PPP loan applications totaling more than $30 million. He also submitted four EIDL applications totaling $950,000. The applications werent just inflated – they were built on stolen identities.

According to court documents, Eldabbagh used a stolen identity to disguise the ownership of Alias Systems LLC. He stole tax returns and financial records from a Washington D.C. consulting company. He doctored those stolen documents to create fake payroll records and tax filings. Every application was fraud layered on fraud.

He actualy obtained $2,385,000 before the scheme collapsed. The government traced the money. They identified the stolen identities. They built a case that left nothing to argue about.

Elias Eldabbagh was sentenced to 10 years in federal prison. A decade. The judge also ordered forfeiture of his Tesla and seized bank accounts, plus a money judgment of $2,385,000. He owes the government everything he stole, and hes spending ten years paying for how he tried to get it.

Think about that timeline. Ten years in federal prison means Eldabbagh wont be free until sometime around 2035. By then, the pandemic will be ancient history. But his conviction will still be fresh on every background check, every job application, every attempt to rebuild his life.

Heres what makes the Eldabbagh case particulary instructive for anyone worried about their own PPP exposure in D.C. The investigation didnt happen overnight. Agents traced money through multiple accounts. They identified stolen identities. They obtained documents from the consulting company whose records he stole. They built a case so comprehensive that pleading guilty was the only realistic option. When they charged him, there was nothing to argue about. The evidence was complete.

The FBI agents and IRS-CI specialists working these cases in Washington arent generalists. Their financial crimes experts. Career federal law enforcement with decades of experience following money through shell companies and fabricated records. When they open your file, they already know what questions to ask.

When Think Tanks Get Caught Thinking Wrong

In September 2025, the U.S. Attorney for the District of Columbia announced civil settlements with six non-profit organizations. These werent fly-by-night operations. These were established, respected organizations with professional staff and legal counsel.

Third Way describes itself as a think tank. They analyze policy. They study how government programs work. They took a PPP loan of $974,771 – and according to the government, they werent eligible for it. The settlement: $1,949,542. Double what they took.

Center for Immigration Studies, another think tank, applied for a “second draw” PPP loan of $366,160. Second-draw loans had stricter eligibility requirements. The settlement: $401,299.

DACOR – Diplomatic and Consular Officers Retired, Inc. – received $203,032. The settlement: $355,306.

The Armenian National Committee of America, a 501(c)(4) non-profit, received $92,340. The settlement: $184,681.

These are organizations with lawyers on staff, compliance departments, and boards of directors. They still got caught. They still paid double.

Heres the thing about non-profit PPP fraud that most people dont understand. The eligibility rules were complicated. “Non-profit” dosent automatically mean “eligible.” Some organizations qualified. Some didnt. The ones that took money they werent entitled to are now paying it back – with penalties.

The False Claims Act Math That Destroys Organizations

Let me explain how the False Claims Act works, because the math matters.

When you submit a false claim to the federal government – including a fraudulent PPP application – the government can recover double or triple the amount of the fraud, plus penalties of up to $11,665 per false claim. The settlement numbers you see in D.C. arent random. Their calculated based on this formula.

Third Way’s $974,771 loan became a $1.9 million settlement because the False Claims Act allows for double damages. That extra million dollars came from the organization’s operating budget. From donations that were supposed to fund research. From reserves that were supposed to provide stability.

And the settlements become public record. Every news outlet covered the September 2025 announcement. Every donor, every board member, every potential partner can now search and find that these organizations agreed to resolve fraud allegations. The reputational damage may exceed the financial cost.

Heres what this means for anyone in D.C. who works for a non-profit that took a questionable PPP loan. The government is still pursuing these cases. The False Claims Act has its own statute of limitations – six years from the violation or three years from when the government discovers it, up to ten years total. Organizations that committed fraud in 2020 can still be pursued through 2030.

If your organization took a PPP loan and there are questions about eligibility, the time to address this is before the government sends a civil investigative demand. Before the lawyers get involved. Before the settlement negotiations that end with your organization’s name in a DOJ press release.

Non-profit board members should understand something important about these settlements. The liability doesnt always stay with the organization. Board members who approved fraudulent applications can face personal liability. Executive directors who signed false certifications can be charged individually. The organization might settle, but individuals might still be prosecuted. These are seperate tracks, and the government can pursue both.

Think about what happens to a non-profit’s mission after a False Claims Act settlement. Major donors see the headlines and reconsider their giving. Grant applications get scrutinized more carefully. The organization’s credibility – the foundation of its influence – takes a hit that takes years to rebuild. Third Way will recover. But the reputational damage lasts longer than the financial impact.

Your Options in the District

If your reading this because you have PPP exposure in Washington D.C. – whether personal or organizational – you have three basic options. None of them are perfect. Each carries its own risks.

Option 1: Wait and hope. This is what most people do. You tell yourself the government is focused on bigger cases. You hope your file never gets opened. Maybe it works out. But if it dosent – if that subpoena arrives or that agent calls – youll have wasted years you could have spent preparing. Youll be scrambling when you should be strategizing.

Option 2: Voluntary disclosure. In some cases, coming forward before your contacted can result in more favorable treatment. The DOJ has shown willingness to credit cooperation, including self-disclosure. For organizations, this might mean negotiating a smaller settlement before litigation becomes necessary. But disclosure is risky. Your essentialy admitting wrongdoing the government might never have discovered.

Option 3: Get counsel now and prepare. Even if you dont do anything proactive, having a lawyer review your situation means youll be ready if something happens. Youll understand your exposure. Youll have thought through responses. A good federal defense attorney can look at your PPP application, compare it to eligibility requirements, and tell you honestly what your facing.

At Spodek Law Group, we handle federal criminal defense and regulatory matters across the country, including the District of Columbia. The consultation is protected by attorney-client privilege – nothing you tell us can be used against you. That means you can be completely honest about what happened.

Heres what preparation looks like. You gather every document related to your PPP application – the application itself, the supporting documentation you submitted, your actual financial records from 2019 and 2020. You compare what you said with what was true. You identify discrepancies. You think through whether those discrepancies have innocent explanations or whether they represent material misrepresentations.

If agents contact you, you know what to say: “I want to speak with my attorney before answering any questions.” You already have an attorney who knows your situation. Your not improvising.

The difference between prepared defendants and unprepared defendants often determines the outcome. When agents show up at your door or call your office, the first hour shapes everything that follows. People who panic say things they cant take back. People who are prepared invoke their rights and call their lawyer. One path leads to additional charges. The other path keeps options open.

The Statute Runs Until 2031

Congress extended the statute of limitations for PPP fraud to ten years. That means a loan application from April 2020 can be prosecuted until April 2030. EIDL applications from 2021 can be prosecuted until 2031. The government has years left to build cases.

The D.C. U.S. Attorney’s Office isnt slowing down. The September 2025 non-profit settlements prove the infrastructure is still running. Cases are still being investigated. Settlements are still being negotiated. Indictments are still being drafted.

Federal sentences are not like state sentences. There is no parole in the federal system. When Elias Eldabbagh got 10 years, he’ll serve at least 85% of that – 8.5 years minimum. When Wendy Villatoro got 15 months, she’ll serve at least 12.75 months. The time is real.

And after the sentence, the consequences continue. Professional licenses get revoked. Security clearances get denied. Career opportunities disappear. A federal fraud conviction follows you on every background check for the rest of your life. In Washington D.C., where so much employment depends on trust and access, that conviction becomes a permanent barrier.

The silence you’ve been hearing isn’t protection. It’s just the part of the process where the investigation hasn’t reached you yet.

If your facing potential PPP fraud exposure in Washington D.C., the time to talk to a lawyer is now. Not after the subpoena. Not after the indictment. While you still have options.

Call 212-300-5196 for a confidential consultation. The nation’s capital is still prosecuting pandemic fraud. The question is whether your name is on a file somewhere – and what you’re going to do about it.

Wendy Villatoro was a Homeland Security Commissioner. Roberto Adams was a police officer. The organizations that settled were think tanks and advocacy groups with professional staff. All of them thought their positions provided protection. All of them were wrong. The silence in Washington D.C. ends when it ends – and you dont get to choose the timing.