Negotiating Plea Agreements in PPP Loan Fraud Cases

Negotiating Plea Agreements in PPP Loan Fraud Cases

Thanks for visiting Spodek Law Group – a second-generation law firm managed by Todd Spodek, with over 40 years of combined experience negotiating federal plea agreements. If you’re facing PPP fraud charges, you need to understand that roughly 97% of federal prosecutions result in convictions, and most resolve through plea agreements. This article explains how we negotiate plea deals that minimize prison time, reduce financial penalties, and protect your future.

Plea negotiations in PPP cases are strategic chess matches against experienced federal prosecutors. The government wants prison time, restitution, and another conviction statistic. We want alternative sentencing, reduced charges, and the best possible outcome for you. This is where experience matters – and where early intervention gives us the most leverage.

Why Most PPP Cases Plead Out

Federal prosecutors win at trial. They have unlimited resources, time to build cases, and conviction rates above 95%. When you’re charged with wire fraud, bank fraud, or conspiracy related to PPP loans, the evidence against you is typically substantial – application documents, bank records, tax returns, witness statements. Going to trial is expensive, risky, and often results in harsher sentences than plea agreements offer.

That doesn’t mean you should accept the government’s first offer. Initial plea proposals from prosecutors are starting positions, not final terms. They expect negotiation. Our job is identifying weaknesses in the government’s case and using them to negotiate better terms.

The Best Time to Negotiate Is Before Charges Are Filed

If you’re under investigation but not yet charged, you have maximum leverage. Prosecutors haven’t committed to their theory of the case. They haven’t presented evidence to a grand jury. They haven’t issued a public indictment. This creates opportunities to shape the outcome before formal charges.

We can approach prosecutors with evidence that negates criminal intent – documentation showing honest mistakes, reliance on professional advice, program confusion. Sometimes this results in declination, where the government decides not to prosecute. More often, it positions us to negotiate charging statutes and plea terms from a position of strength.

Once charges are filed, prosecutors become invested in their case. Changing their position requires them to admit they overcharged or misunderstood facts. That’s harder to accomplish, though not impossible.

Negotiating Charging Statutes

PPP fraud can be charged under multiple statutes with vastly different penalties. Wire fraud carries up to 30 years. Bank fraud carries up to 30 years. False statements carry up to 5 years. Conspiracy charges carry penalties tied to the underlying offense. Which statutes prosecutors charge determines your sentencing exposure.

Defense attorneys with experience in PPP cases know prosecutors don’t uniformly insist on the harshest charges. If we can demonstrate that your conduct doesn’t support wire fraud or bank fraud elements, we negotiate for false statements charges instead. That reduces maximum prison time from 30 years to 5 years – a critical difference in plea negotiations.

The best time to negotiate charging statutes is during the investigation, before prosecutors draft an indictment. Once they’ve charged specific offenses, backing down looks like weakness. Getting involved early matters.

Loss Calculations Drive Sentencing Guidelines

Federal sentencing guidelines calculate prison time based on the “loss” amount. In PPP cases, this can be either the loan amount you received or the amount prosecutors claim you intended to obtain. The difference matters enormously.

Say you received a $150,000 PPP loan, but you used $100,000 for legitimate payroll expenses. Should the loss be $150,000 or $50,000? We argue for actual loss, not intended loss. We document exactly how PPP funds were spent, identifying legitimate business expenses that reduce the loss figure.

Lower loss amounts mean lower guideline ranges. A $50,000 loss might suggest 10-16 months imprisonment. A $150,000 loss might suggest 21-27 months. Prosecutors don’t always insist on intended loss calculations in PPP cases – especially when we can document legitimate use of funds. This becomes a major negotiation point in plea agreements.

Enhancement Provisions Can Be Negotiated

Sentencing guidelines include enhancement provisions that increase recommended prison time. For fraud involving disaster or emergency benefits, guidelines suggest an enhancement. For defendants who played leadership roles in multi-person schemes, there’s another enhancement. For sophisticated means or mass marketing, additional enhancements apply.

Federal prosecutors have discretion about whether to pursue these enhancements. In some PPP cases, they don’t insist on the disaster-benefit enhancement. We’ve negotiated plea agreements where the government agreed not to seek leadership enhancements even though multiple people were involved. Each enhancement we eliminate reduces the guideline range and recommended prison time.

Cooperation Can Reduce Sentences

If you have information about other people involved in PPP fraud, cooperation with prosecutors can significantly reduce your sentence. Cooperation isn’t appropriate for everyone and comes with serious risks – prosecutors expect complete honesty and substantial assistance. But when viable, it’s one of the most powerful tools for reducing prison time through a 5K1.1 motion, where prosecutors ask judges to depart downward from guidelines.

Alternative Sentencing and Probation

Not every PPP fraud case results in prison time. For defendants with minimal criminal history, lower loss amounts, and mitigating circumstances, we negotiate for probation or home confinement. Mitigating factors include voluntary repayment before charges, legitimate use of most PPP funds, lack of criminal history, and strong community ties. We build comprehensive sentencing memoranda documenting every factor supporting leniency. Judges aren’t required to follow sentencing guidelines – they’re advisory.

Restitution and Forfeiture Negotiations

Beyond prison time, PPP fraud cases involve restitution and forfeiture. Restitution amounts can be negotiated. If you received $200,000 but used $150,000 for legitimate payroll, we argue restitution should be $50,000, not $200,000. Forfeiture becomes complicated when PPP funds were commingled with legitimate business income. We trace exactly where funds went and fight to protect assets that weren’t purchased with fraudulently-obtained money.

Acceptance of Responsibility

Federal sentencing guidelines provide a 2-3 level reduction for defendants who accept responsibility for their conduct. This translates to real prison time reduction – potentially months or years depending on the guideline range.

Accepting responsibility doesn’t mean admitting to everything prosecutors allege. It means pleading guilty without forcing the government to trial, not committing perjury, and demonstrating genuine remorse. We negotiate the specific language of plea agreements to ensure you receive credit for acceptance of responsibility while not admitting to conduct you didn’t commit.

Why Experience in Federal Plea Negotiations Matters

At Spodek Law Group, Todd Spodek has negotiated federal plea agreements throughout his career – including in high-profile fraud cases covered by major media outlets like the New York Post, Bloomberg, and Newsweek. Federal plea negotiations require understanding sentencing guidelines, knowing what prosecutors will and won’t agree to, and building relationships with Assistant U.S. Attorneys.

We know which arguments work and which ones waste time. We know when to push for better terms and when we’ve reached the government’s bottom line. We know how to present mitigating evidence in ways that resonate with prosecutors and judges.

If you’re facing PPP fraud charges or under investigation, time matters. The earlier we get involved, the more leverage we have to negotiate favorable plea terms. Contact us immediately – we’re available 24/7 to review your case and discuss negotiation strategies.