NJ SBA Fraud PPP Loan Fraud Defense Lawyers

Thanks for visiting Spodek Law Group – a second-generation criminal defense firm managed by Todd Spodek, with over 50 years of combined experience defending federal fraud cases throughout the United States. If you’re under investigation or charged with SBA loan fraud in New Jersey, you’re facing federal prosecutors who have made pandemic-related fraud enforcement their top priority since 2021. The U.S. Attorney’s Offices in Newark, Trenton, and Camden have charged hundreds of defendants with PPP and EIDL fraud, pursuing business owners who allegedly inflated payroll figures, misrepresented employee counts, used funds for unauthorized purposes, or submitted applications through shell companies designed to multiply loan proceeds. What makes New Jersey prosecutions particularly dangerous is prosecutors treat these cases like sophisticated financial fraud schemes, applying the same aggressive tactics used against corporate criminals – even when you’re a small business owner who made errors under economic pressure without criminal intent.

How Federal Investigations Start in New Jersey

Most defendants don’t know they’re under investigation until agents show up at their door or business. SBA Office of Inspector General and FBI analyze loan data looking for patterns: businesses that received disproportionately large loans compared to past tax returns, multiple loans to related entities with overlapping ownership, companies formed shortly before pandemic eligibility cutoff dates, spending that raises red flags like luxury purchases or large cash withdrawals immediately after loan deposits. Once investigators identify suspicious activity, they subpoena bank records going back years, pull tax returns, interview former employees and business partners.

Here’s what often happens: you get a call from FBI saying they want to “clarify some information” about your PPP loan, making it sound routine. They show up at your business acting friendly, like they’re just checking boxes. They ask you to explain how you calculated payroll figures, what you spent loan proceeds on, how many employees you had during the covered period. You think you’re cooperating, being transparent, helping clear up confusion. What you don’t realize – every statement you make can become evidence against you if it contradicts documentation they already have. That “friendly interview” becomes a false statements charge under 18 U.S.C. § 1001 when prosecutors later claim you lied to federal agents.

Bank Fraud and Wire Fraud Charges

Bank fraud under 18 U.S.C. § 1344 is the most serious charge in PPP cases, carrying a maximum of 30 years in federal prison. Prosecutors use this statute whenever you allegedly made false statements to obtain funds from a financial institution – which includes PPP loans since banks administered the program on behalf of SBA. The statute doesn’t require proof you intended to permanently deprive the bank of funds; prosecutors only need to show you knowingly made material misrepresentations to obtain money. That means even if you fully intended to use proceeds for legitimate business purposes and eventually repay the loan, prosecutors can still charge bank fraud if they claim your application contained false statements.

Wire fraud charges get added when you used electronic communications during the application process – submitting online applications, sending emails to lenders, transferring funds electronically. Each electronic communication can constitute a separate wire fraud count, which is how prosecutors stack charges to create exposure of decades or even centuries in theoretical prison time. We’ve seen cases where prosecutors charged 15 separate wire fraud counts for a single PPP loan application, each carrying 20 years maximum, creating theoretical exposure of 300 years – all to pressure defendants into guilty pleas.

Common Defense Strategies That Actually Work

The strongest defense challenges intent – did you knowingly make false statements, or did you make good-faith errors, rely on bad advice, or reasonably interpret ambiguous guidance? We build intent defenses by gathering evidence showing you consulted accountants or attorneys before applying, that you relied on their calculations and representations, that professionals reviewed your application materials. Even if the professionals made errors, that demonstrates you lacked criminal intent.

We also exploit ambiguities in SBA guidance. During 2020, SBA issued conflicting guidance about eligibility requirements, payroll calculations, covered expenses, and documentation standards. Interim final rules changed multiple times, creating genuine confusion about what was permitted. We present evidence that reasonable business owners could interpret guidance differently, that your interpretation was defensible even if ultimately incorrect, that the government itself was confused about program rules during rapid implementation.

Challenging Loss Calculations

Even when guilt seems likely, we fight over loss amounts because they drive sentencing. Under federal guidelines, fraud loss determines base offense levels – the difference between $150,000 and $400,000 loss can add 4-6 levels, translating to years of additional prison time. Prosecutors calculate loss as the full loan amount, but we argue for offsets: amounts spent on legitimate business expenses reduce actual loss, government recovered funds when you cooperated, economic benefits from maintaining business operations offset harm. We hire forensic accountants who analyze your spending and testify that substantial portions were legitimate, reducing loss calculations from hundreds of thousands to tens of thousands.

Cooperation and Proffer Agreements

When evidence is overwhelming, cooperation becomes an option – but a dangerous one requiring careful consideration. Cooperation means providing information about others involved in fraud, testifying against co-defendants, working with prosecutors to build cases against targets higher up criminal organizations. The benefit is substantial assistance departures that can reduce sentences by 50% or more, sometimes resulting in probation even when guidelines call for significant prison time.

But cooperation has serious risks. You’re required to disclose all criminal conduct – not just the charged offense, but everything you’ve ever done. If prosecutors discover you lied or withheld information, they’ll void your agreement and use your proffer statements against you. You may need to testify at trial, facing cross-examination from defense attorneys trying to destroy your credibility. You face retaliation risks from co-defendants or others you testified against. For many defendants, cooperation isn’t realistic, and alternative strategies – accepting responsibility, demonstrating limited role, presenting powerful mitigation – become the path to favorable outcomes.

New Jersey Federal Sentencing

Federal judges in New Jersey impose sentences that vary widely based on judge, district, and case specifics. Some judges in Newark are known for below-guideline sentences in fraud cases when defendants accept responsibility early and present strong mitigation. Other judges consistently impose within-guideline sentences, giving little weight to personal circumstances. We research judicial tendencies, analyze past sentencing transcripts, and tailor arguments to the specific judge assigned.

Sentencing hearings are where cases are won or lost for many defendants. Guidelines produce a range – say, 24-30 months – but judges have discretion to vary below that range based on 18 U.S.C. § 3553(a) factors: nature and circumstances of the offense, history and characteristics of the defendant, need for the sentence to reflect seriousness and promote deterrence, need to avoid unwarranted disparities. We present mitigation packages showing: lack of criminal history, family circumstances, community support through letters from employers and neighbors, rehabilitation efforts, charitable work, the extraordinary context of the pandemic that created economic desperation. We’ve secured probationary sentences for defendants facing guideline ranges calling for 2-3 years by presenting judges with powerful reasons to vary below guidelines.

What Spodek Law Group Brings to Your Defense

We defend SBA and PPP fraud cases in federal court throughout New Jersey and nationwide. We intervene during investigations before charges are filed, negotiating with prosecutors and presenting evidence that leads to declinations. We file motions to suppress evidence, dismiss charges, and exclude testimony. We conduct independent investigations, hire forensic accountants and industry experts, and challenge the government’s narrative at every stage. At trial, we cross-examine cooperating witnesses aggressively, impeach their credibility, and present defenses focused on intent and reasonable interpretation of ambiguous guidance.

At Spodek Law Group, Todd Spodek has built a reputation defending cases others thought unwinnable – like the client whose story became a Netflix series. When you’re facing decades in federal prison for SBA fraud charges in New Jersey, early intervention and aggressive defense make the difference between incarceration and freedom. We’re available 24/7 to discuss your case. Reach out now – waiting until after indictment limits your options dramatically.