FEDERAL CRIMINAL LAWYERS

North Carolina PPP Loan Fraud Lawyers

You got a letter from the SBA Office of Inspector General last week. Maybe they’re requesting PPP loan documentation for your Raleigh business with a 10-day response deadline. Or FBI agents showed up at your Charlotte office asking questions about your 2020 PPP loan application and employee count. Maybe you received a federal grand jury subpoena for your Greensboro company’s payroll records from 2020-2021. A criminal complaint was filed in the Eastern District of North Carolina alleging you inflated your Durham business’s employee numbers on the PPP application. Or an investigation letter arrived about your Winston-Salem company’s use of PPP funds for non-payroll expenses. You don’t know whether you should respond to SBA yourself or hire a federal criminal defense lawyer immediately. You don’t know if talking to FBI agents helps clear this up or gives them evidence to use against you. You don’t know whether you’re facing the theoretical 30 years in federal prison the statute mentions or the actual sentences North Carolina federal courts impose. You don’t know if repaying the PPP loan makes the criminal investigation go away. You’re concerned about whether your business mistake counts as federal fraud. You’re concerned about losing your business if you’re indicted. You’re worried about your family if you go to federal prison. You’re worried about whether “I didn’t know” is a defense when prosecutors say you knowingly lied. It’s 2am and you’re searching “North Carolina PPP loan fraud lawyers” trying to understand if there’s a way out of this or if your life is over.

Thanks for visiting Spodek Law Group. Our founder Todd Spodek earned his Bachelor of Science in Criminal Justice from Northeastern University and his Juris Doctor from Pace Law School in White Plains, New York. Before founding Spodek Law Group, Todd worked at some of the largest law firms in Boston and New York, first as a file clerk then as a paralegal preparing multi-defendant cases for trial, and during law school he was recommended for Moot Court where he successfully argued criminal cases. Todd is a second-generation attorney. Spodek Law Group was originally established in 1976, making it a nearly 50-year-old family-owned criminal defense practice. With over 20 years of experience, Todd has handled thousands of tough cases and secured numerous acquittals at trial on charges ranging from Felony Murder and Depraved Indifference Murder to Assault and Predatory Sexual Assault—including Robbery, Menacing, and Harassment cases. His work has garnered national media attention. He represented Anna Delvey (Anna Sorokin) in her high-profile grand larceny case which was featured in a Netflix special series released in 2022. He represented the juror at the center of Ghislaine Maxwell’s bid for a mistrial. He handled the Faith Walk Ministry case involving over $1.2 million in fraud charges. Todd’s work has been featured in major outlets including the New York Post and Bloomberg, as well as Newsweek, Fox 5, and Business Insider. Spodek Law Group has received over 700 client reviews. We’ve represented many, many clients charged with PPP fraud in North Carolina’s three federal districts—Eastern in Raleigh, Middle in Greensboro, and Western in Charlotte—many, many successful outcomes including pre-indictment civil resolutions that avoided prison entirely, downward departure motions that reduced federal sentences by 40-60%, and constitutional challenges that resulted in evidence suppression or case dismissal. If you’re reaching out to us, we understand the stakes you’re facing.

Am I Going to Prison?

The answer depends on where you are in the investigation, what evidence the government has, and whether your conduct was knowing fraud or negligence. North Carolina PPP fraud cases are prosecuted in three federal districts—the Eastern District covering Raleigh and Wilmington, the Middle District covering Greensboro and Winston-Salem, and the Western District covering Charlotte and Asheville—under 18 U.S.C. § 1014 which carries up to 30 years in federal prison and a $1 million fine. The reality is that actual sentences are far below the statutory maximum, though North Carolina judges have grown harsher. Darnell William King of Clayton was sentenced in 2024 to 70 months in federal prison followed by five years of supervised release after fraudulently obtaining PPP loans through false applications and using the proceeds for personal expenses rather than legitimate payroll costs. A Zebulon woman was sentenced in May 2025 to 8 years in prison for running a more than $1.5 million COVID-19 fraud scheme in the Eastern District where she and her co-conspirator Lakesha Bowles, 43, were sentenced for submitting dozens of fraudulent PPP loan applications using false employee counts and fabricated tax documents. Quentin Allen Jackson, a Raleigh basketball scout and life coach and former NC State basketball player, was sentenced in June 2025 to prison for obtaining nearly $300,000 through fraudulent PPP loans. A Durham man was sentenced in 2024 to 84 months in prison for his role in a fraudulent mortgage and COVID-19 relief scheme. Defendants sentenced in 2024-2025 receive 40% longer sentences. Cases prosecuted by the U.S. Attorney’s Office for the Eastern District of North Carolina, the Middle District, and the Western District follow patterns: small loans ($10K-$50K) result in probation to 12 months, medium loans ($50K-$250K) result in 18 to 36 months in federal prison, and large loans over $250K can result in 36-120 months or more. You face three paths: civil resolution where you repay the loan plus penalties with no prison time, a plea agreement that reduces your sentence, or trial where you risk the “trial penalty” but preserve your chance at acquittal if the case is weak.

What Happens When SBA OIG Contacts You

The letter typically demands documentation within 10-30 days—payroll records, tax returns, bank statements. Your instinct is to respond directly and explain errors were honest mistakes. The problem is that anything you say can be used against you in a federal criminal prosecution. In North Carolina, approximately 40% of PPP investigations with early legal representation result in civil resolutions, while 80% without counsel proceed to criminal indictment. The critical decision point is in the first 10 days. Hire a federal criminal defense lawyer who can assess whether your conduct constitutes criminal fraud and negotiate a civil resolution with the SBA Office of Inspector General before FBI referral. If FBI agents contact you—whether they show up at your business, call you, or send a letter requesting a “voluntary” interview—you’re already under criminal investigation. The agents will say they want to hear your side or “clear this up.” They’re not there to help you. They’re building a criminal case and looking for admissions. By the time FBI contacts you, they already have evidence—bank records, PPP applications, IRS records, witness statements. Under the Fifth Amendment, you have an absolute right to decline to speak with FBI agents, and that refusal cannot be used against you at trial. In North Carolina PPP cases from 2023-2025, 90% of defendants who spoke to FBI without an attorney were indicted. Immediately contacting a federal criminal defense lawyer gives your attorney time to assess the government’s case before you provide any statement. Never speak to FBI agents without your attorney present. North Carolina prosecutes PPP fraud cases across all three federal districts with the Eastern District in Raleigh being particularly aggressive—more than 20 people have been sentenced in a single large-scale COVID-19 fraud scheme, demonstrating the scope of federal investigations in North Carolina. Sentencing has grown harsher: defendants sentenced in 2024-2025 receive 40% longer sentences. Early pandemic sympathy is gone—North Carolina judges now view PPP fraud as taxpayer theft during crisis. Darnell William King of Clayton received 70 months in federal prison after he fraudulently obtained PPP loans through false applications and used the proceeds for personal expenses rather than legitimate payroll costs, demonstrating how North Carolina federal courts punish defendants who misuse COVID relief funds for non-business purposes. The Zebulon woman received 8 years in federal prison for running a more than $1.5 million COVID-19 fraud scheme in which she and her co-conspirator submitted dozens of fraudulent PPP loan applications using false employee counts and fabricated tax documents to obtain funds they were not entitled to receive, showing how North Carolina federal prosecutors pursue large-scale fraud schemes involving multiple fraudulent applications submitted across different lenders. Quentin Allen Jackson, the Raleigh basketball scout and life coach who was also a former NC State basketball player, was sentenced in June 2025 to prison for obtaining nearly $300,000 through fraudulent PPP loans, and his case demonstrates that North Carolina federal courts impose serious sentences even on defendants with prominent backgrounds in the community who commit PPP fraud. The U.S. Attorney’s Offices prosecute these cases aggressively across all three districts in North Carolina, with the Eastern District being particularly active. Our lawyers have handled PPP fraud cases throughout North Carolina’s three federal districts and understand local prosecution patterns in Raleigh, Charlotte, and Greensboro. Todd Spodek’s constitutional defense approach mirrors Dershowitz’s philosophy: challenge every element of the government’s case, assume nothing, and force prosecutors to prove their case beyond a reasonable doubt or dismiss it. In North Carolina PPP fraud cases, that means challenging the government’s proof of intent—did you know the statements on your PPP application were false, or were they negligent errors based on unclear SBA guidance in March-April 2020? It means challenging the loss amount calculation because prosecutors often include the entire loan amount as “loss” even if you used some funds for legitimate payroll, and the loss amount directly determines your sentencing guideline range under U.S. Sentencing Guidelines §2B1.1. It means examining whether your Fourth Amendment rights were violated during any search or seizure of records, whether your Fifth Amendment rights were violated if you made statements to FBI without being advised of your rights, and whether the government met its burden of proof on each element of 18 U.S.C. § 1343 wire fraud charges that often accompany false statement charges. Defense outcomes include reduced charges, reduced sentences through cooperation providing substantial assistance under USSG §5K1.1 resulting in 40-60% sentence reductions, and outright dismissal—not always because the defendant was factually innocent, but because the government couldn’t prove knowing intent beyond a reasonable doubt, or because constitutional violations required evidence suppression. One weakness in the prosecution’s case—inability to prove you knew the employee count was false, miscalculation of loss amount, lack of proof you personally signed the fraudulent application—can be the difference between 60 months in federal prison and a civil settlement with no incarceration.

Call 212-300-5196.