Iowa PPP Loan Fraud Lawyers

Thanks for visiting Spodek Law Group. We’re a second-generation law firm managed by Todd Spodek, with over 40 years of combined experience defending federal criminal cases nationwide. If you’re facing a PPP loan fraud investigation in Iowa, you need to understand what’s happening and what comes next. Federal prosecutors in the Northern and Southern Districts of Iowa have been actively pursuing pandemic loan fraud cases, and Iowa business owners are facing serious federal charges for conduct ranging from deliberate fraud to honest mistakes on confusing applications.

Des Moines, Cedar Rapids, Davenport, Sioux City – we’re seeing cases across Iowa. The charges carry significant exposure: wire fraud under 18 U.S.C. § 1343 carries up to 20 years in federal prison. Bank fraud under 18 U.S.C. § 1344 carries up to 30 years. Even making false statements under 18 U.S.C. § 1001 carries 5 years. And federal investigators aren’t just going after obvious scammers with fake businesses – they’re scrutinizing legitimate business owners who inflated numbers, who misunderstood program requirements, who made errors they thought were acceptable.

How Iowa Business Owners Get Investigated

The SBA distributed billions in emergency funding through the PPP program during the pandemic. Iowa businesses – farms, restaurants, retail stores, professional services – applied for and received loans to cover payroll and other expenses. Now federal investigators are auditing those loans systematically, comparing applications against tax returns, matching claimed payroll against actual records, tracking where funds actually went.

What triggers an investigation? The SBA flags your loan for audit. Maybe there’s a discrepancy in your forgiveness application. Maybe your loan amount seems disproportionate to your reported revenue. Maybe someone – a disgruntled employee, a business partner, a competitor – tipped off investigators. That referral goes to the SBA Office of Inspector General, then to the FBI or IRS Criminal Investigation.

They spend months building a case before contacting you. They pull your complete loan file, your business tax returns going back years, your personal tax returns, your business bank records. They interview your employees. They review your payroll service records if you use one. They build a timeline of where every dollar went and identify every discrepancy between what you claimed on your application and what documentation actually shows.

What the Common Allegations Are

You inflated your employee count to qualify for a larger loan. You claimed your business was operational before February 2020 when it wasn’t. You used loan funds for personal expenses instead of covered business purposes. You applied for multiple PPP loans using different but related business entities without disclosing the connections. You certified you had no delinquent federal debts when you did. These are the actual allegations we see in Iowa cases.

Take a typical scenario: a small Iowa business owner applied for a $75,000 PPP loan. On the application, they claimed 12 full-time equivalent employees. But their 2019 tax returns only showed 8 employees. The difference? They included some seasonal workers and independent contractors, thinking that was reasonable. To them, these people worked for the business and needed to be paid. To federal prosecutors, that’s wire fraud.

Or consider the restaurant owner who received a $50,000 PPP loan and used $30,000 for payroll and rent, but used $20,000 to pay down personal credit cards they’d used to fund the business during slow periods. They figured they were reimbursing themselves for business expenses. Federal prosecutors see that as theft of government funds.

The Federal Investigation Process in Iowa

Most Iowa defendants we work with had no idea they were under investigation until federal agents showed up or they received a target letter. By that point, investigators have already gathered extensive evidence and formed conclusions about your guilt. That’s why your initial response matters so much.

Federal agents might call you asking to “discuss your loan application.” They might show up at your business or home. You might receive a grand jury subpoena for documents. Or you could get a target letter from the U.S. Attorney’s Office stating you’re under criminal investigation and inviting you to make a statement.

None of these require you to talk. You have a Fifth Amendment right to remain silent – use it. Even if you believe you did nothing wrong, talking to federal agents without a lawyer is dangerous. They’re trained investigators who know how to ask questions that elicit admissions or create inconsistencies in your story. Those inconsistencies become evidence of “consciousness of guilt” or outright lying.

Why Criminal Intent Matters

Federal fraud charges require proof of criminal intent. Prosecutors must prove you knowingly made false statements with intent to defraud. This intent element is where defenses get built. Did you genuinely misunderstand the application requirements? The PPP program was created quickly with confusing guidance that changed multiple times. Did you reasonably believe independent contractors counted toward your employee total? Did you think certain expenses qualified as covered uses when the rules were ambiguous?

Good faith mistake is a real defense. If your conduct resulted from honest misunderstanding rather than intentional deception, that negates criminal intent. We build this defense by documenting the confusion around program rules, showing you consulted with accountants or attorneys, demonstrating you relied on their professional advice, proving you used funds for business purposes even if not technically covered.

Reliance on professional advice helps significantly. If you worked with a CPA who calculated your payroll numbers, and you provided them with accurate information, their errors or misinterpretations don’t become your criminal liability. We gather all communications with advisors showing you sought guidance and relied on their expertise in good faith.

Iowa Federal Court Sentencing

Iowa has two federal districts: Northern District (covering Cedar Rapids, Sioux City, Waterloo) and Southern District (covering Des Moines, Davenport, Council Bluffs). Federal judges in both districts have varied approaches to sentencing PPP fraud cases. Some are more lenient with first-time offenders who used funds partially for legitimate purposes. Others take a harder line on pandemic fraud regardless of circumstances.

Sentencing calculations start with the U.S. Sentencing Guidelines. Fraud offense levels are based on loss amount – the loan amount you received. A $20,000 loan results in one base offense level; a $200,000 loan results in a much higher level. Then enhancements apply: sophisticated means, affecting a financial institution, being an organizer if others were involved. Your criminal history category adjusts the guideline range.

A typical scenario: $60,000 in fraudulent PPP loans, no criminal history, partial legitimate use of funds. Base offense level might be 12-14. After enhancements, you’re looking at 10-16 months in guideline range. Without cooperation or substantial mitigation, that’s likely your sentence. With cooperation and strong mitigation arguments, probation becomes possible. With aggravating factors, you could face significantly more time.

Cooperation Agreements in Iowa Cases

Iowa federal prosecutors often offer cooperation deals. You plead guilty and agree to provide information about other loan fraud schemes or participants. In exchange, the government files a motion for downward departure under U.S.S.G. § 5K1.1 or Rule 35(b), which can reduce your sentence below guideline ranges – sometimes substantially.

We’ve seen cooperation reduce sentences from years in prison to probation. But cooperation comes with risks. You’re admitting guilt. You’re potentially testifying against others. You’re spending time in proffer sessions with prosecutors. And there’s no guarantee the sentence reduction will be worth it – that’s discretionary.

Before agreeing to cooperate, your lawyer needs to negotiate the terms. What exactly do prosecutors want you to admit? What information do they want about others? What’s the realistic sentence benefit? What happens if your cooperation doesn’t provide as much value as expected? These details matter because once you’ve signed a cooperation agreement and made statements, you can’t retract them.

Why Spodek Law Group Handles Iowa Cases

We’re based in New York but defend federal criminal cases nationwide. Federal court operates the same way everywhere – same statutes, same sentencing guidelines, same procedural rules. What varies is local prosecutor discretion and judicial temperament. We learn those quickly by researching recent Iowa case outcomes and understanding what arguments work with your specific judge.

Todd Spodek grew up in his father’s law firm – he’s a second-generation criminal defense attorney who’s handled hundreds of federal cases. You might have seen him on Netflix representing Anna Delvey. Our firm includes former federal prosecutors who understand how these investigations work, what evidence the government needs, and where weaknesses exist in their cases.

Our approach: get involved early, before charges if possible. We conduct our own investigation – gathering your business records, interviewing witnesses, analyzing your loan application and fund usage. Sometimes we present evidence to prosecutors that convinces them not to file charges. Other times we negotiate favorable plea terms. When necessary, we go to trial.

You can reach us anytime – we’re available 24/7. Initial consultations are risk-free with no time limits. We use a digital portal for all communications and documents so you can manage your case from anywhere in Iowa. We work on transparent fee structures without hidden costs.

What You Need to Do Right Now

Don’t talk to federal agents without a lawyer. Not to “clear things up.” Not to “tell your side.” Everything you say gets documented and used against you. Agents know how to ask questions that elicit admissions or create inconsistencies. Those inconsistencies become evidence of lying.

Don’t destroy documents or delete communications. That’s obstruction of justice under 18 U.S.C. § 1519, carrying up to 20 years. Even if something seems damaging, destroying it after you know there’s an investigation makes things exponentially worse.

Don’t discuss your case with anyone except your attorney. Federal investigators can subpoena your business partners, employees, family, accountant – anyone you talked to. Only communications with your lawyer are privileged.

Hire a federal criminal defense lawyer who handles white-collar cases. Not a general practice attorney. PPP loan fraud requires specific knowledge of the Sentencing Guidelines, cooperation agreements, and federal court procedure.

Call us before this gets worse. Federal investigations don’t disappear. They either result in declined prosecution – which requires your lawyer actively advocating – or they result in indictment. Get representation now while you have maximum leverage.