New York PPP and EIDL 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 throughout New York and nationwide. If you’re facing a PPP or EIDL loan fraud investigation in New York, you’re dealing with serious federal charges in one of the most aggressive prosecution districts in the country. The Southern District of New York, Eastern District, Northern District, and Western District have all made pandemic loan fraud enforcement a top priority.

New York City, Long Island, Albany, Buffalo, Rochester – we’re seeing cases across the state. The exposure is significant: wire fraud carries 20 years in federal prison, bank fraud carries 30 years, and making false statements carries 5 years. And federal prosecutors in New York aren’t just targeting obvious fraud schemes – they’re scrutinizing legitimate business owners who inflated payroll numbers, who misunderstood eligibility requirements, who used funds in ways they thought were acceptable but technically weren’t.

Why New York Has So Many PPP Fraud Prosecutions

New York saw massive PPP and EIDL loan volume during the pandemic. The state was hit hard by shutdowns – restaurants closed, retail stores struggled, professional services went remote. Businesses desperately needed emergency funding. The SBA distributed billions in loans across New York. Now federal investigators – working with the SBA Office of Inspector General, FBI, and IRS Criminal Investigation – are auditing those loans systematically.

The Southern District of New York, which covers Manhattan, the Bronx, and parts of surrounding counties, is particularly aggressive. SDNY prosecutors have a reputation for pursuing high-profile fraud cases, and they’ve devoted significant resources to PPP fraud prosecutions. The Eastern District, covering Brooklyn, Queens, Long Island, and Staten Island, has been similarly aggressive. The Northern and Western Districts covering upstate New York have also charged numerous defendants.

What Triggers an Investigation

The SBA flags your loan for audit. Maybe there’s a discrepancy between your application and your forgiveness request. Maybe your loan amount seems disproportionate to your reported 2019 revenue. Maybe you received multiple loans. Maybe an algorithm identifies unusual patterns. Maybe someone – a disgruntled employee, a former business partner, a competitor – tips off investigators. That referral goes to federal investigators who spend months building a case before you ever know they’re looking at you.

They compare your application against your tax returns. They match claimed payroll numbers against actual payroll records from ADP, Paychex, or whatever service you use. They track where funds went by reviewing your business bank accounts transaction by transaction. They interview your employees. They sometimes conduct surveillance on your business. By the time they contact you, they’ve already gathered extensive evidence and formed conclusions about your guilt.

Common allegations in New York cases: 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 EIDL funds for personal expenses instead of business purposes. You received both PPP and EIDL funding but didn’t disclose one on the other application. You certified you had no delinquent federal debts when you did. These are the actual allegations we see.

The Federal Investigation Process in New York

Most New York defendants we work with had no idea they were under investigation until federal agents showed up or they received a target letter. The investigation phase happens quietly over many months. The SBA audits your loan. The Office of Inspector General reviews the file. Investigators pull your financial records, talk to your employees, review your tax returns for the past five years.

Then they reach out. Federal agents might call you asking to “discuss your loan application.” They might show up at your business or home – and in New York, they often show up early in the morning for maximum impact. You might receive a grand jury subpoena demanding documents. Or you could get a target letter from the U.S. Attorney’s Office stating you’re under investigation and inviting you to make a statement.

None of these require you to talk to them. 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 exactly how to ask questions that elicit admissions or create inconsistencies in your story. Those inconsistencies become evidence of “consciousness of guilt” or outright lying – which is itself a separate federal crime under 18 U.S.C. § 1001.

Criminal Intent and Defense Strategies

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 and EIDL programs were 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 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 by documenting the confusion around program rules in 2020, showing you consulted with accountants or attorneys, demonstrating you relied on professional advice, proving you used funds for business purposes even if not technically covered.

Reliance on professional advice is powerful, especially in New York where many business owners worked with CPAs and attorneys. If you provided accurate information to your advisor and relied on their calculations or interpretations, their errors don’t become your criminal liability. We gather all communications with advisors showing you sought guidance and relied on their expertise in good faith.

New York Federal Court Sentencing

New York’s four federal districts each have their own courthouse cultures. The Southern District in Manhattan is known for tough sentences and aggressive prosecutors. The Eastern District in Brooklyn has varied judicial approaches. The Northern District covering Albany and upstate areas tends to be somewhat more lenient. The Western District covering Buffalo and Rochester falls somewhere in between.

Sentencing calculations start with the U.S. Sentencing Guidelines. Fraud offense levels are based on loss amount – the loan amount you received. A $50,000 loan results in one base offense level; a $500,000 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: $100,000 in fraudulent PPP and EIDL loans combined, no criminal history, partial legitimate use of funds. Base offense level might be 16. After enhancements, you’re looking at 21-27 months in guideline range. Without cooperation or substantial mitigation, that’s likely your sentence in the Southern or Eastern Districts. With cooperation and strong mitigation arguments, probation becomes possible. With aggravating factors like obstruction, you could face significantly more time.

Cooperation Agreements in New York

New York federal prosecutors – particularly in SDNY and EDNY – frequently 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 dramatically.

We’ve seen cooperation reduce sentences from years in prison to probation. But cooperation in New York comes with particular risks. You’re admitting guilt to your own conduct. You’re potentially testifying against others in a state with deep business connections. You’re spending months in proffer sessions with prosecutors who are known for being demanding and thorough. And there’s no guarantee the sentence reduction will be substantial – that’s entirely discretionary.

Before agreeing to cooperate, your lawyer needs to negotiate the specific 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 they hoped? These details matter because once you’ve signed a cooperation agreement and made statements, you can’t retract them.

Why Spodek Law Group for New York Cases

We’re based in New York – we have offices throughout Long Island and NYC at 233 Broadway in Manhattan and 195 Montague Street in Brooklyn. We know these federal courts intimately. Todd Spodek is a second-generation lawyer who grew up working in his father’s law firm in New York, watching court proceedings from childhood. He’s handled hundreds of federal cases in the Southern District, Eastern District, and other New York federal courts.

You might have seen him on Netflix representing Anna Delvey in one of the most high-profile fraud cases in recent New York history. Or read about our representation of the juror in the Ghislaine Maxwell case. We’re known for taking on cases other New York firms won’t touch, cases they say are unwinnable. Our team includes former federal prosecutors who understand how SDNY and EDNY build these cases, what evidence they need, and where weaknesses exist.

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 how funds were actually used. Sometimes we present evidence to prosecutors that convinces them not to file charges. Other times we negotiate favorable plea terms that minimize your exposure. And when necessary, we go to trial in New York federal courts where we’ve tried numerous cases.

You can reach us anytime – we’re available 24/7 for consultations. Initial calls are risk-free with no time limits. We want you to understand your situation fully. We use a completely digital portal for all communications and documents. And we work on transparent fee structures without surprises.

What You Must Do Right Now

Don’t talk to federal agents without a lawyer present. Even if you think you’re just clarifying misunderstandings, everything you say gets documented and used against you. New York federal agents are particularly skilled at interview techniques 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 in federal prison. New York prosecutors take obstruction very seriously and will add charges if they catch you destroying evidence.

Don’t discuss your case with anyone except your attorney. Not your business partner. Not your spouse. Not your accountant. Federal investigators can subpoena all of them to testify. Only attorney-client communications are privileged.

Hire a federal criminal defense lawyer who handles white-collar cases in New York federal courts, not a general practice attorney. PPP and EIDL fraud prosecutions involve complex financial documentation, sentencing guideline calculations, cooperation negotiations, and New York federal court procedure. You need someone who does this regularly in these specific courts.

Call us before this gets worse. Federal investigations don’t just disappear. They either result in declined prosecution – which requires your lawyer actively presenting your defense to prosecutors – or they result in indictment. Which outcome you get depends on having experienced New York federal defense representation from the moment you learn you’re under investigation. The earlier we get involved, the more options you have and the better outcome we can achieve.