PPP Loan Fraud Investigation 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 investigations and prosecutions nationwide. If you’re under investigation for PPP loan fraud, you’re at the most critical stage of your case – before charges are filed, when strategic intervention can sometimes prevent prosecution entirely or result in significantly more favorable outcomes than waiting until after indictment. Federal investigations into PPP fraud are conducted by the FBI, SBA Office of Inspector General, IRS Criminal Investigation, and sometimes Secret Service, with investigators analyzing loan data to identify suspicious patterns, subpoenaing bank records and tax returns, interviewing witnesses, and building cases that prosecutors present to grand juries for indictment. What makes the investigation stage so dangerous is that many targets don’t realize they’re under scrutiny until agents show up at their door or business, by which point investigators have already gathered substantial evidence and formed conclusions about your guilt.

How Federal PPP Fraud Investigations Start

Most investigations begin through data analysis. SBA Office of Inspector General and other agencies use algorithms to identify red flags: loans disproportionate to business size based on past tax returns, multiple loans to entities with overlapping ownership or addresses, businesses formed shortly before pandemic eligibility cutoff dates, spending patterns that raise suspicions like luxury purchases or large cash withdrawals immediately after loan deposits, loans to businesses in industries known for fraud schemes. Once investigators identify suspicious activity, they open investigations and start gathering evidence before you know you’re a target.

Other investigations start from whistleblower complaints. Former employees, business partners, accountants, or family members report alleged fraud to federal authorities or file qui tam lawsuits under the False Claims Act. These complaints provide investigators with insider information: details about how you prepared applications, evidence that figures were inflated, documentation of expenditures prosecutors consider personal rather than business-related. Whistleblower-initiated investigations are particularly dangerous because the complainant provides a roadmap that would otherwise take investigators months to develop.

Signs You’re Under Investigation

Often the first indication you’re under investigation comes when federal agents contact you directly. FBI or SBA-OIG agents show up at your home or business, identify themselves, and ask to speak with you about your PPP loan. They make it sound routine, like they’re just clarifying information or checking boxes. They act friendly, non-threatening, like you’re not in trouble. This is strategy – they want you to talk without a lawyer present because anything you say can become evidence against you.

Other signs include: your bank contacts you saying federal agents served a subpoena for your records, employees or business partners mention being interviewed by investigators, accountants or attorneys who worked on your applications receive subpoenas, or you discover grand jury subpoenas were issued for documents related to your business. If you experience any of these, you’re under active investigation and need counsel immediately.

Why You Should Never Talk to Investigators Without Counsel

Federal agents are trained interrogators who know how to get people to make damaging admissions without realizing it. They might tell you that talking to them will help clear things up, that refusing to talk makes you look guilty, that they just need to verify a few details. This is false. Anything you tell investigators will be used against you if you’re charged. They’re not your friends, they’re not trying to help you, they’re building a criminal case.

Even if you think you did nothing wrong and have nothing to hide, talking to investigators without counsel is dangerous. You might make statements that contradict documentation they already have, giving them false statements charges under 18 U.S.C. § 1001. You might provide information that helps them understand your business operations in ways that support their fraud theory. You might inadvertently admit facts that seem innocent to you but which prosecutors use to establish criminal intent.

Invoking Your Rights

If federal agents approach you, invoke your right to counsel immediately. Tell them: “I’m invoking my Fifth Amendment right to remain silent and my Sixth Amendment right to counsel. I will not answer questions without my attorney present.” Then contact a lawyer immediately. Don’t try to explain yourself, don’t answer “just a few questions,” don’t think you can talk your way out of trouble. Exercise your constitutional rights and get representation.

What Happens During Federal Investigations

During investigations, federal agents gather evidence from multiple sources. They subpoena bank records going back years, examining deposits, withdrawals, transfers, and spending patterns. They pull your tax returns from IRS, comparing reported income and payroll to figures on your loan applications. They subpoena payroll records from third-party processors like ADP or Paychex, verifying whether you actually had the employees and payroll you claimed. They interview former employees, asking whether they worked during periods you claimed, whether they received paychecks, whether you discussed misusing loan proceeds.

Investigators also conduct surveillance in some cases, photographing your home, vehicles, and lifestyle to document what they claim are signs of fraud proceeds – luxury cars, expensive homes, jewelry, travel. They analyze your social media, looking for posts showing purchases or lifestyle inconsistent with struggling business owner who needed pandemic relief. They build comprehensive financial profiles showing every dollar in and out of your accounts, constructing narratives about how you allegedly obtained and misused funds fraudulently.

Pre-Indictment Intervention Strategies

When you learn you’re under investigation, that’s the moment to hire experienced counsel and potentially avoid charges altogether. We intervene by contacting prosecutors and presenting evidence contradicting their fraud theory before they present the case to a grand jury. We provide documentation showing: you made good-faith errors rather than knowing false statements, you relied on accountants or attorneys who gave bad advice, SBA guidance was ambiguous about your situation and your interpretation was reasonable, you spent substantial portions of proceeds on legitimate business expenses, you’ve already repaid questionable amounts.

Federal prosecutors have enormous discretion whether to charge cases. When we intervene early with compelling evidence showing lack of criminal intent or materiality, we sometimes persuade prosecutors that federal prosecution isn’t warranted. We’ve successfully obtained declinations – decisions not to prosecute – by demonstrating that alleged conduct doesn’t meet fraud elements under federal law, that proof problems make conviction uncertain, that the case doesn’t justify federal resources.

Proffer Agreements and Cooperation

Sometimes prosecutors offer proffer agreements during investigations, allowing you to provide information about your conduct and others’ involvement under limited immunity. Proffer sessions can be valuable opportunities to present your side of the story before charges are filed, but they’re also extremely dangerous. Anything you say during proffers can be used against you if prosecutors determine you lied, and proffer statements can be used to impeach you if you testify differently at trial.

We evaluate whether proffer sessions make strategic sense in your case. If you have genuinely exculpatory information that prosecutors are missing, proffers can sometimes prevent charges. If you can provide valuable information about others’ criminal conduct, cooperation during investigation stage can result in more favorable treatment than cooperating after indictment. But if your story has weaknesses or contradicts evidence prosecutors already have, proffer sessions can strengthen the case against you.

Document Preservation and Production

Once you know you’re under investigation, you have legal obligations to preserve documents. Destroying or concealing evidence is obstruction of justice under 18 U.S.C. § 1519, carrying 20 years maximum. Don’t delete emails, shred documents, or alter records – even if they’re incriminating. Obstruction charges often result in harsher sentences than underlying fraud charges.

We advise you on document preservation requirements and help gather materials that support your defense. We organize financial records, communications with accountants and lenders, business operational documents, and evidence of legitimate business activities. We prepare to produce documents in ways that minimize harm while complying with legal obligations, sometimes negotiating with prosecutors about scope and timing of production.

Grand Jury Process

If prosecutors decide to charge you, they typically present the case to a grand jury – a group of citizens who hear evidence and vote whether probable cause exists to indict. Grand jury proceedings are one-sided: prosecutors present their evidence, you’re not allowed to attend, and defense attorneys can’t present contrary evidence. Grand juries indict in over 99% of cases they hear, essentially rubber-stamping prosecutors’ charging decisions.

However, you can sometimes testify before the grand jury if prosecutors allow it. This is extremely risky – you’ll be questioned by prosecutors without your attorney in the room, and anything you say can be used against you. But in rare cases, grand jury testimony can persuade jurors not to indict by presenting your side of the story directly. We evaluate whether grand jury testimony makes strategic sense based on strength of the government’s evidence and your ability to testify effectively under pressure.

What Spodek Law Group Does During Investigations

We represent clients during federal fraud investigations nationwide, intervening before charges are filed to pursue declinations or more favorable charging decisions. We communicate with prosecutors on your behalf, presenting evidence contradicting criminal intent and demonstrating why prosecution isn’t warranted. We prepare comprehensive submission packages including legal memoranda, supporting documentation, and expert opinions showing why alleged conduct doesn’t meet fraud elements.

We advise you on whether to participate in interviews, proffers, or grand jury testimony based on strategic analysis of risks and benefits. We ensure you comply with document preservation obligations while organizing materials that support your defense. We investigate the case independently, interviewing witnesses and gathering evidence before prosecutors lock in their theories.

At Spodek Law Group, Todd Spodek has defended high-profile cases others thought unwinnable – including the client whose story became a Netflix series. When you’re under investigation for PPP fraud, early intervention with experienced counsel can mean the difference between facing decades of criminal charges versus never being charged at all. We’re available 24/7. Reach out immediately – investigations move quickly and windows for intervention close once prosecutors present cases to grand juries.