Kansas City 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 nationwide. If you’re facing a PPP or EIDL loan fraud investigation in Kansas City, the stakes are high. Federal prosecutors in the Western District of Missouri have been aggressive about pursuing pandemic loan fraud charges, and Kansas City business owners are getting charged with serious federal crimes for conduct that ranges from obvious fraud schemes to mistakes on confusing applications.

Kansas City sits in the Western District of Missouri, which covers much of western Missouri. Federal prosecutors here have made PPP and EIDL fraud enforcement a priority. The charges carry significant exposure: wire fraud under 18 U.S.C. § 1343 carries up to 20 years in federal prison. Bank fraud under 18 U.S.C. § 1344 carries up to 30 years. Making false statements under 18 U.S.C. § 1001 carries 5 years. And they’re not just targeting deliberate scammers – they’re scrutinizing legitimate business owners who inflated payroll numbers, who misunderstood eligibility requirements, who used funds in ways they thought were acceptable.

Why Kansas City Business Owners Get Investigated

The SBA distributed billions in emergency funding through PPP and EIDL programs. Kansas City businesses – from restaurants to retail stores to professional services – applied for and received loans. Now federal investigators are auditing those loans, comparing applications against tax returns, matching claimed payroll against actual records, tracking where funds went by reviewing business bank accounts.

Common triggers for investigation: The SBA flags your loan because of a discrepancy in your forgiveness application. Your loan amount seems disproportionate to your reported revenue. An algorithm identifies unusual patterns. Someone – a disgruntled employee, a former business partner, a competitor – tips off investigators. That referral goes to the SBA Office of Inspector General, then to the FBI or IRS Criminal Investigation.

They build their case quietly. They pull your complete loan file, your business tax returns, your personal tax returns, your bank records. They interview your employees. They review your payroll service records. They spend months gathering evidence before you ever know they’re investigating. By the time they contact you, they’ve already formed conclusions about your guilt.

The Allegations We See in Kansas City Cases

You claimed 20 employees on your PPP application when you actually had 14. You said your business was operational since 2018 when it didn’t start until 2020. You used EIDL funds to pay personal credit cards instead of business expenses. You received both PPP and EIDL funding but didn’t disclose one on the other application. You certified you had no delinquent federal student loans when you did. These are actual allegations from Kansas City cases we’ve handled.

Take a typical scenario: a Kansas City restaurant owner applied for a $100,000 PPP loan. On the application, they claimed 15 full-time equivalent employees based on 2019 payroll. But when investigators pulled their tax returns, only 11 employees were reported. The difference? The owner included some family members who worked there occasionally and thought that was reasonable. To federal prosecutors, that’s wire fraud.

Or consider the small business owner who received a $50,000 EIDL loan and used most of it for legitimate business expenses, but also used $10,000 to pay off a car loan for a vehicle they used partially for business. They figured it was a business expense. Federal prosecutors see it as theft.

How These Cases Get Built and Charged

Most Kansas City defendants we work with say the same thing: they had no idea there was a problem until federal agents showed up or they received a target letter. The investigation phase happens quietly over 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. You might receive a grand jury subpoena demanding documents. Or you could get a target letter from the U.S. Attorney’s Office in Kansas City 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.

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 count? 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. If you worked with a CPA who calculated your payroll numbers or helped with your application, and you provided them with accurate information, 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.

Kansas City Federal Court Sentencing

The Western District of Missouri federal courthouse in Kansas City handles these prosecutions. Federal judges here have varied approaches to sentencing PPP fraud cases. Some are relatively lenient with first-time offenders who used funds partially for legitimate purposes. Others take pandemic fraud seriously regardless of circumstances, viewing it as exploitation of a national emergency.

Sentencing calculations start with the U.S. Sentencing Guidelines. Fraud offense levels are based on loan amount. 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 up or down.

A typical scenario: $80,000 in fraudulent PPP and EIDL loans combined, no criminal history, partial legitimate use of funds. Base offense level might be 14. After enhancements, you’re looking at 15-21 months in guideline range. Without cooperation or substantial mitigation, that’s likely your sentence. With cooperation and strong mitigation arguments, probation becomes possible. With aggravating factors like obstruction, you could face significantly more time.

Cooperation Agreements in Kansas City

Federal prosecutors in Kansas City often 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 isn’t right for everyone. You’re admitting guilt to your own conduct. You’re potentially testifying against others, which has personal and safety implications. You’re spending months in proffer sessions with prosecutors detailing everything you know. 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 Kansas City Cases

We’re based in New York but handle federal criminal defense cases nationwide. Federal law applies the same way in Kansas City as anywhere else – same criminal statutes, same sentencing guidelines, same procedural rules. What varies is local prosecutor culture, judicial temperament, and enforcement priorities. We adapt by researching recent Kansas City case outcomes, consulting with local Missouri counsel when beneficial, and understanding what arguments resonate with your specific judge.

Todd Spodek is a second-generation lawyer who grew up working in his father’s law firm, watching court proceedings from childhood. He’s handled hundreds of federal cases – from high-profile matters you’ve seen on Netflix to complex white-collar prosecutions that never made headlines. Our team includes former federal prosecutors who understand how these investigations work, what evidence the government needs, and where weaknesses exist in their cases.

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 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. We’ve taken on cases other firms said were unwinnable.

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 before deciding whether to hire us. We use a completely digital portal for all communications, documents, and billing so you can manage your case from anywhere. And we work on transparent fee structures without surprises or hidden costs.

What You Must Do 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. Agents are trained to ask questions 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. Even if something seems damaging, destroying it after you know there’s an investigation makes everything exponentially worse. Your lawyer can work with problematic documents; prosecutors use destroyed documents to prove consciousness of guilt and add new charges.

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, not a general practice attorney. PPP and EIDL fraud prosecutions involve complex financial documentation, sentencing guideline calculations, cooperation negotiations, and federal court procedure. You need someone who does this regularly.

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 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.