Sacramento 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 prosecutions nationwide. If you’re facing PPP loan fraud charges in Sacramento, you’re dealing with federal prosecutors from the Eastern District of California who handle pandemic fraud cases at the Robert T. Matsui U.S. Courthouse on I Street in downtown Sacramento. These prosecutors have charged business owners throughout the capital region – including Elk Grove, Roseville, Folsom, Davis, and surrounding Sacramento County communities – with bank fraud, wire fraud, and false statements for allegedly inflating payroll figures, misrepresenting employee counts, using proceeds for unauthorized purposes, or submitting applications through multiple entities prosecutors claim were shells created to multiply loan amounts. What makes Sacramento cases particularly aggressive is that Eastern District prosecutors have made pandemic fraud a major enforcement priority, treating small business owners like sophisticated fraudsters even when errors were made under economic pressure during unprecedented crisis, with prosecutors routinely seeking harsh sentences that treat desperate pandemic decisions as criminal schemes.

PPP Fraud Enforcement in Sacramento

The Eastern District of California, headquartered in Sacramento, has been among the most active federal districts in prosecuting PPP fraud. Prosecutors have announced dozens of cases involving business owners from throughout Northern California who allegedly obtained loans fraudulently. One Sacramento case that drew media attention involved a business owner charged with obtaining $1.5 million across multiple entities – prosecutors argued the companies were shells with no legitimate operations and overlapping employees, while defense claimed they were separately managed businesses with distinct operations entitled to individual loans. After conviction, the court imposed an 8-year sentence, signaling how seriously Sacramento federal judges treat these cases.

Sacramento prosecutors have also pursued EIDL fraud cases aggressively, particularly those involving identity theft where defendants allegedly used stolen information to submit multiple applications. These cases frequently result in aggravated identity theft charges under 18 U.S.C. § 1028A, carrying mandatory consecutive 2-year sentences that must run after any sentence imposed on underlying fraud charges. Even defendants with no criminal history face significant prison time when identity theft enhancements are added.

Federal Charges in Sacramento Cases

Bank fraud under 18 U.S.C. § 1344 is the most serious charge in PPP cases, carrying up to 30 years in federal prison. This statute applies whenever you allegedly made false statements to obtain funds from financial institutions, which includes PPP loans since banks administered the program on behalf of SBA. Sacramento prosecutors use this statute aggressively, arguing that any material misstatement on loan applications constitutes bank fraud regardless of whether you intended to use proceeds legitimately or planned to repay loans.

Wire fraud charges under 18 U.S.C. § 1343 get stacked on top when you used electronic communications during the application or funding process: submitting online applications, emailing documents to lenders, receiving wire transfers. Each electronic communication can be charged as a separate count. We’ve seen Sacramento prosecutors charge 12-20 wire fraud counts for single loan applications, creating theoretical exposure of 240-400 years to pressure defendants into guilty pleas rather than trials.

Conspiracy and Money Laundering

In cases involving multiple defendants or complex schemes, prosecutors add conspiracy charges under 18 U.S.C. § 371, which makes all conspirators responsible for the entire amount of fraud committed by any member. Money laundering charges under 18 U.S.C. § 1956 get added when prosecutors claim your spending patterns demonstrate you knew funds were obtained fraudulently – purchasing vehicles, making large cash withdrawals, or transferring funds in ways prosecutors frame as evidence of criminal intent.

Building Effective Defenses

The strongest defenses challenge intent and materiality. Prosecutors must prove you knowingly made false statements – not that you made good-faith errors or relied on incorrect advice from accountants. We build intent defenses by presenting evidence that you consulted professionals before applying, that you relied on their calculations and recommendations, that you made reasonable interpretations of SBA guidance that was genuinely ambiguous during rapid program implementation in early 2020.

We present testimony from accountants and business advisors you consulted, showing they reviewed your materials and advised your applications were accurate. We present character witnesses who testify about your reputation for honesty and legitimate business operations throughout Sacramento spanning years. We show you disclosed information to lenders voluntarily, demonstrating lack of fraudulent intent.

Challenging Materiality

Even when statements were false, prosecutors must prove they were material – meaning they influenced lending decisions. If you overstated payroll by $30,000 but would have qualified for the same loan with accurate figures, that undermines the fraud charge. If banks approved your loan despite obvious red flags that should have triggered denial, that suggests your statements weren’t material. We hire forensic accountants who testify about whether alleged misstatements actually affected loan amounts or eligibility.

Negotiating with Sacramento Prosecutors

Assistant U.S. Attorneys in Sacramento handle substantial PPP fraud caseloads, which creates both pressure to resolve cases efficiently and desire to secure convictions that justify the resources devoted to pandemic fraud enforcement. We negotiate from positions of strength when possible: identifying weaknesses in government evidence, highlighting proof problems, demonstrating that trials will be expensive and uncertain.

We push for reduced charges – pleading to false statements under 18 U.S.C. § 1001 instead of bank fraud reduces maximum exposure from 30 years to 5 years, dramatically affecting guideline calculations. We also fight over loss amounts because they drive sentencing guidelines. Government claims $400,000 loss, we present evidence showing $160,000 was spent on payroll and rent – reducing actual loss to $240,000 and lowering offense levels by 2-4 points, translating to years less incarceration.

Sacramento Federal Sentencing

Federal judges in the Eastern District of California are known for varying widely in their sentencing approaches. Some judges impose below-guideline sentences when presented with compelling mitigation, while others consistently sentence within or above guideline ranges, emphasizing deterrence and the seriousness of defrauding government programs during national emergency. We research judicial tendencies, analyze past sentencing transcripts, and tailor our arguments to the specific judge assigned to your case.

Successful sentencing requires presenting powerful evidence beyond just asking for leniency: demonstrating lack of criminal history, strong family and community ties throughout Sacramento, acceptance of responsibility, rehabilitation efforts, charitable work, and the extraordinary economic pressures of the pandemic that created desperation rather than greed. We present letters from community members, employers, family, and religious leaders who vouch for your character.

Acceptance of Responsibility and Cooperation

Accepting responsibility early – before trial – reduces your offense level by 2-3 points under sentencing guidelines, translating to roughly 6-12 months less incarceration. But accepting responsibility requires careful consideration of what you’re admitting. We negotiate with prosecutors about the scope: admitting you made false statements without admitting you knew they were false at the time, acknowledging errors without conceding criminal intent.

When evidence is overwhelming, cooperation becomes an option. Cooperation means providing information about others involved in fraud, testifying against co-defendants, and working with prosecutors to build cases. The benefit is substantial assistance departures that can reduce sentences by 50% or more. But cooperation has serious risks: you must disclose all criminal conduct, you may face retaliation, and if prosecutors discover you lied they’ll void your agreement and use your statements against you.

Pre-Indictment Intervention

If you learn about an investigation early – because investigators contacted your bank, interviewed employees, or agents approached you for voluntary interviews – that’s the critical moment to hire counsel. We’ve successfully negotiated declinations by presenting prosecutors with evidence showing: you made good-faith errors, you relied on professional advice, ambiguous SBA guidance made it reasonable to interpret eligibility differently, you’ve already repaid questionable amounts, your business was and remains legitimate.

Federal prosecutors in Sacramento have discretion whether to charge cases. When we intervene early with compelling evidence contradicting criminal intent or demonstrating lack of materiality, we sometimes persuade prosecutors that federal prosecution isn’t warranted. Even when we can’t prevent charges entirely, early intervention often results in more favorable outcomes – reduced charges, fewer counts, lower loss amounts.

What Spodek Law Group Does for Sacramento Defendants

We defend PPP fraud cases in Sacramento federal court and throughout California. We intervene during investigations before charges are filed, presenting evidence to prosecutors that sometimes leads to declinations. After indictment, we file motions challenging the legal sufficiency of charges, arguing that alleged conduct doesn’t meet fraud elements. We move to suppress evidence obtained through improper searches or overly broad subpoenas.

We conduct independent investigations, interviewing witnesses prosecutors ignored and hiring forensic accountants who testify about why alleged misstatements weren’t material or why your conduct was consistent with legitimate practices. At trial, we cross-examine cooperating witnesses about their criminal histories and motivations to fabricate. We present defenses focused on intent, materiality, and good-faith reliance on ambiguous guidance.

At sentencing, we present mitigation packages showing your ties to the Sacramento community, lack of criminal history, acceptance of responsibility, rehabilitation efforts, and pandemic circumstances that created economic desperation. We’ve secured probationary sentences and below-guideline terms for defendants facing guideline ranges calling for years in prison by humanizing them to judges and presenting compelling reasons for leniency.

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 facing decades in federal prison for PPP fraud charges in Sacramento, aggressive defense from day one determines the outcome. We’re available 24/7 at our offices throughout NYC and Long Island. Reach out now – early intervention makes all the difference in federal fraud prosecutions.