NJ SBA Fraud / PPP Loan Fraud Defense Lawyers

Thanks for visiting Spodek Law Group, a second-generation firm managed by Todd Spodek – with over 50 years combined experience defending federal fraud prosecutions nationwide. If you’re facing PPP loan fraud charges in New Jersey, you’re dealing with federal prosecutors from the U.S. Attorney’s Offices in Newark, Trenton, or Camden who have made pandemic fraud a top enforcement priority. These offices have prosecuted hundreds of PPP and EIDL cases since 2020, securing indictments against business owners throughout Bergen County, Essex County, Hudson County, and across the state for alleged false statements on loan applications, misuse of funds, and what prosecutors call “loan stacking” schemes. What makes New Jersey cases particularly aggressive is the district’s history with financial fraud – federal prosecutors here built their reputations on corporate fraud cases and apply that same intensity to PPP prosecutions, treating small business owners like sophisticated fraudsters even when mistakes were made in good faith during economic chaos.

New Jersey’s PPP Prosecution Landscape

The District of New Jersey has been relentless. Prosecutors in Newark have charged defendants with bank fraud carrying 30-year maximums for conduct like inflating employee counts by just a few workers, overstating payroll by amounts that seem negligible compared to the loan size, or spending proceeds on expenses they believed were legitimate business costs but which prosecutors now claim were personal. Take the case that made headlines in Bergen County – business owner charged with obtaining $500,000 across three entities, with prosecutors arguing the companies were shells created solely to multiply loan amounts. Defense argued the entities were legitimate, separately managed, and entitled to individual loans under SBA guidance. Jury convicted anyway. That’s the climate in New Jersey right now.

EIDL Fraud Prosecutions

New Jersey prosecutors also target Economic Injury Disaster Loans aggressively, particularly cases involving identity theft where defendants allegedly used stolen information to apply for multiple EIDL advances. These cases often involve younger defendants – some in their early twenties – who prosecutors claim participated in fraud rings submitting hundreds of applications using fabricated businesses and stolen identities. The sentences have been harsh: defendants with no prior records receiving multi-year prison terms for conduct prosecutors frame as sophisticated identity theft schemes, even when the defendant’s role was minimal or they were following instructions from others without fully understanding the criminality.

Common Defense Challenges in NJ Federal Court

Federal judges in New Jersey – particularly in Newark and Trenton – have reputations for being tough on fraud. They’ve seen decades of financial crime cases and approach pandemic fraud with skepticism about economic hardship defenses. You walk into sentencing arguing your business was struggling, you made desperate decisions under pressure, you believed you were eligible – judge has heard it before. Doesn’t mean these arguments don’t matter, but you need more than sympathy. You need evidence that challenges the government’s narrative about your intent and the materiality of any alleged misstatements.

We focus on discovery fights early. Federal prosecutors in New Jersey often rely on bank records and application documents without thoroughly investigating the context surrounding your business operations. We subpoena documents they ignored – communications with accountants, correspondence with business partners, records showing legitimate business activities. We depose witnesses prosecutors never interviewed. Frequently we uncover evidence that contradicts the government’s theory: you consulted professionals who gave bad advice, SBA guidance was ambiguous about your situation, your business legitimately employed the workers you claimed, payroll calculations were reasonable interpretations of confusing regulations.

Intent and Materiality Defenses

Prosecutors must prove you knowingly made false statements. That word – knowingly – does heavy lifting in fraud cases. It’s not enough for the government to show the statement was false; they must prove you knew it was false when you made it. We build intent defenses by showing you relied on professionals, that you made good-faith interpretations of ambiguous guidance, that time pressure and economic crisis made errors understandable rather than criminal. Character witnesses testify you operated businesses honestly for years before the pandemic. Business partners explain how decisions were made collaboratively, without fraudulent intent.

Materiality is equally important. Even if a statement was false, prosecutors must prove it was material – meaning it influenced the lending decision. We hire forensic accountants who analyze whether the alleged misstatement actually affected your loan amount or approval. If you inflated payroll by $20,000 but would have qualified for the same loan with accurate figures, that undermines the fraud charge. If SBA approved your loan despite red flags that should have triggered denial, that suggests your statements weren’t material to the decision.

Negotiating with New Jersey Prosecutors

When evidence is strong, negotiation becomes critical. New Jersey AUSAs have discretion but also face pressure to secure convictions given the district’s focus on pandemic fraud. We negotiate from positions of strength when possible – identifying weaknesses in the government’s case, highlighting proof problems, demonstrating that contested trials will be expensive and uncertain for the government. We push for reduced charges: false statements under § 1001 instead of bank fraud reduces exposure from 30 years to 5 years, a massive difference for sentencing purposes.

Loss amount calculations determine guideline ranges, and we fight prosecutors aggressively over these numbers. Government claims $400,000 loss, we show $150,000 was spent on legitimate expenses, reducing actual loss to $250,000 – that difference can mean years less incarceration under guidelines. We challenge restitution amounts similarly, arguing the government benefited from your business maintaining operations and employees during the pandemic, reducing the true economic harm.

What Spodek Law Group Does

We defend PPP and EIDL fraud cases in federal court throughout New Jersey – Newark, Trenton, Camden. We challenge cases at every stage: filing motions to suppress evidence obtained through improper searches or overly broad subpoenas, moving to dismiss charges that don’t meet legal elements of fraud, conducting independent investigations that uncover exculpatory evidence prosecutors ignored. At trial, we cross-examine cooperating witnesses about their own criminal conduct and motivations to fabricate. We present expert witnesses – forensic accountants, industry specialists – who explain why your conduct was consistent with legitimate business practices. We argue to juries that mistakes under pressure during unprecedented economic crisis don’t constitute criminal fraud.

At sentencing, we fight for downward departures and variances. New Jersey judges impose harsh sentences, but they also recognize extraordinary circumstances when presented with compelling mitigation – lack of criminal history, family circumstances, community support, rehabilitation efforts, the unique pressures of the pandemic. We’ve secured probationary sentences for defendants facing guideline ranges calling for years in prison by presenting powerful mitigation and humanizing our clients to judges who otherwise see only financial crime statistics.

At Spodek Law Group, we’ve handled federal fraud cases across the country for decades. Todd Spodek has defended clients in cases others called unwinnable – you might know about the Netflix series featuring one of his clients. When you’re facing decades in federal prison for PPP fraud charges in New Jersey, the defense strategy you choose determines whether you’re fighting from a position of strength or just hoping for mercy. We’re available 24/7 at our offices throughout NYC and Long Island, representing clients in New Jersey federal courts. Reach out now – early intervention in these cases makes an enormous difference in outcomes.