North Carolina PPP Loan Fraud Lawyers

Thanks for visiting Spodek Law Group – a second-generation criminal defense firm managed by Todd Spodek, with over 50 years combined experience defending federal fraud cases nationwide. If you’re facing PPP loan fraud charges in North Carolina, you’re dealing with federal prosecutors from the Eastern, Middle, or Western Districts who have made pandemic fraud a major enforcement focus since 2020. These offices have prosecuted business owners throughout Charlotte, Raleigh, Durham, Greensboro, and Winston-Salem for alleged false statements on loan applications, misuse of proceeds, and what prosecutors call loan stacking schemes involving multiple applications through related entities. What makes North Carolina cases particularly concerning is the aggressive approach U.S. Attorney’s Offices take – treating small business owners like sophisticated fraudsters even when errors were made under economic pressure during unprecedented crisis, with prosecutors seeking harsh sentences that treat pandemic desperation as criminal intent.

PPP Fraud Enforcement in North Carolina

The Western District covering Charlotte has been especially active, announcing dozens of PPP fraud prosecutions and securing guilty pleas from defendants who allegedly inflated payroll figures, misrepresented employee counts, or used funds for purchases prosecutors deemed personal rather than business-related. One case that made headlines involved a Charlotte business owner who received $1.8 million across multiple entities – prosecutors argued the companies were shells created to multiply loan amounts, while defense claimed they were legitimate separately-managed businesses entitled to individual loans. After conviction, the court imposed an 8-year sentence, signaling how seriously federal judges in North Carolina treat these cases.

The Eastern and Middle Districts have similarly aggressive enforcement. Prosecutors in Raleigh and Greensboro have charged defendants with bank fraud carrying 30-year maximums for conduct that defendants believed was permissible: using proceeds for business expenses that didn’t fit SBA’s narrow definition of “payroll costs,” making good-faith errors in calculating eligible expenses, or applying through multiple entities without realizing it violated program rules. The reality is that prosecutors apply strict liability to application statements – if the statement turns out false, they argue that’s fraud regardless of your intent or the confusion surrounding program guidance during rapid implementation.

Common Charges in North Carolina Federal Court

Bank fraud under 18 U.S.C. § 1344 is the most serious charge prosecutors use, carrying up to 30 years in federal prison. This statute applies 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. Prosecutors don’t need to prove you intended to permanently deprive the bank of funds – they only need to show you knowingly made material misrepresentations to obtain money, even if you planned to use proceeds legitimately and eventually repay the loan.

Wire fraud under 18 U.S.C. § 1343 gets charged when you used electronic communications during the application or funding process. Each email, online application submission, or electronic fund transfer can constitute a separate wire fraud count. We’ve seen North Carolina prosecutors charge 10-15 wire fraud counts for a single loan application, creating theoretical exposure of 200-300 years to pressure defendants into guilty pleas rather than fighting at trial.

False Statements and Money Laundering

False statements charges under 18 U.S.C. § 1001 criminalize lying to federal agencies and carry 5 years maximum. Prosecutors use this statute when you allegedly misrepresented information to SBA even if banks approved your loan without detecting the misstatement. Money laundering charges get added under 18 U.S.C. § 1956 when prosecutors claim your spending patterns show you knew funds were obtained fraudulently – purchasing vehicles, transferring money to family members, or using proceeds for purposes unrelated to business operations that prosecutors argue demonstrate criminal intent.

Building Effective Defenses

The strongest defenses challenge intent and materiality. Prosecutors must prove you knowingly made false statements – that you didn’t just make mistakes under pressure or rely on incorrect information from accountants. We challenge intent by presenting evidence that you consulted professionals before applying, that you relied on their calculations and advice, that you made reasonable interpretations of SBA guidance that was genuinely ambiguous during program rollout. We present character witnesses who testify about your reputation for honesty and legitimate business operations spanning years before the pandemic.

Materiality is equally critical. Even if a statement was false, prosecutors must prove it was material – meaning it influenced the lending decision. If you overstated payroll by $30,000 but would have qualified for the same loan amount with accurate figures, that undermines the fraud charge. If the bank approved your loan despite obvious red flags that should have triggered additional scrutiny, that suggests your statements weren’t material to the approval decision. We hire forensic accountants who analyze whether alleged misstatements actually affected your loan amount or eligibility.

Sentencing in North Carolina Federal Courts

Federal judges in North Carolina vary in their approach to pandemic fraud sentencing. Some judges in Charlotte and Raleigh recognize the extraordinary circumstances of economic crisis and are willing to impose below-guideline sentences when defendants present strong mitigation. Others consistently sentence within or above guideline ranges, emphasizing deterrence and the seriousness of defrauding government programs during national emergencies.

Sentencing guidelines are driven by loss amount. The difference between $150,000 and $400,000 loss can add 4-6 offense levels, translating to years of additional prison time. We fight prosecutors aggressively over loss calculations, arguing for offsets: amounts spent on legitimate business expenses reduce actual loss, funds recovered through asset forfeiture or restitution payments lower the net loss, economic benefits from maintaining business operations and employment offset the harm. We present evidence that substantial portions of loan proceeds went to legitimate expenses – rent, utilities, supplier payments, employee compensation – reducing the loss from the full loan amount to a fraction of what prosecutors claim.

Acceptance of Responsibility

Accepting responsibility early – before trial – reduces your offense level by 2-3 points under sentencing guidelines. That translates to roughly 6-12 months less incarceration for fraud cases in typical guideline ranges. But accepting responsibility requires careful consideration of what exactly you’re admitting. We negotiate with prosecutors about the scope of admissions: admitting you made false statements without admitting you knew they were false at the time, acknowledging errors without conceding criminal intent, taking responsibility for the outcome without accepting the government’s characterization of your conduct as sophisticated fraud.

Pre-Indictment Intervention

Many defendants don’t realize they’re under investigation until agents show up or indictments are filed. But if you become aware of an investigation early – because investigators contacted your bank, interviewed former employees, or agents approached you for voluntary interviews – that’s the time to hire counsel and potentially avoid charges altogether. We’ve successfully negotiated declinations by presenting prosecutors with evidence showing: you made good-faith errors, you relied on professional advice, SBA guidance was ambiguous about your situation, you’ve already repaid questionable amounts, your business was legitimate and continues operating.

Federal prosecutors have discretion whether to charge cases. When we intervene early and present compelling evidence contradicting criminal intent or demonstrating lack of materiality, we sometimes convince prosecutors that the case doesn’t warrant federal prosecution. That outcome – no charges filed – is infinitely better than fighting after indictment when pressure to plead guilty becomes enormous.

What Spodek Law Group Does

We defend PPP fraud cases in North Carolina federal courts and nationwide. We challenge cases at every stage: intervening during investigations before charges are filed, moving to dismiss indictments that don’t meet legal elements of fraud, filing motions to suppress evidence obtained through improper searches or overly broad subpoenas. We conduct independent investigations, interview witnesses prosecutors ignored, and hire expert witnesses – forensic accountants, industry specialists – who testify about ambiguities in SBA guidance and why your conduct was consistent with legitimate business practices.

At trial, we cross-examine cooperating witnesses about their own criminal conduct and motivations to fabricate testimony in exchange for sentencing reductions. We present evidence challenging the government’s loss calculations and demonstrating that alleged misstatements weren’t material. We argue to juries that good-faith errors made under time pressure during economic crisis don’t constitute criminal fraud.

At Spodek Law Group, Todd Spodek has defended high-profile cases that others thought unwinnable – including the client whose story became a Netflix series. When you’re facing decades in federal prison for PPP fraud charges in North Carolina, aggressive defense focused on intent and materiality makes the difference between incarceration and freedom. We’re available 24/7 to discuss your case. Reach out now – early intervention dramatically improves outcomes in federal fraud cases.