San Diego PPP and EIDL Loan Fraud Lawyers

Thanks for visiting Spodek Law Group, a second-generation criminal defense firm managed by Todd Spodek – with over 50 years of combined experience defending federal fraud prosecutions nationwide. If you’re facing PPP or EIDL fraud charges in San Diego, you’re dealing with federal prosecutors from the Southern District of California who handle pandemic fraud cases at the Edward J. Schwartz U.S. Courthouse in downtown San Diego. These prosecutors have charged business owners throughout the metro area – including Chula Vista, Oceanside, Carlsbad, El Cajon, and surrounding San Diego 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 San Diego cases particularly aggressive is that Southern District prosecutors have made pandemic fraud a major enforcement priority, treating these cases with the same intensity they apply to major drug trafficking and border crime prosecutions, with prosecutors routinely seeking harsh sentences that frame desperate pandemic decisions as sophisticated criminal schemes.

Federal PPP Fraud Enforcement in San Diego

The Southern District of California, headquartered in San Diego, has been among the most active federal districts in prosecuting PPP and EIDL fraud. Prosecutors have announced dozens of cases involving business owners throughout San Diego County who allegedly obtained loans fraudulently. One case that drew significant media attention involved a San Diego business owner charged with obtaining $2 million across multiple entities – prosecutors argued the companies were shells with fabricated employees and no legitimate operations, while defense claimed they were separately managed businesses entitled to individual loans. After conviction, the court imposed a 9-year sentence, signaling how seriously San Diego federal judges treat these prosecutions.

EIDL fraud cases in San Diego have also resulted in aggressive enforcement, 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 prior criminal history face significant prison time when identity theft enhancements are added to fraud convictions.

Bank Fraud and Wire Fraud Charges

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. San Diego 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: submitting online applications, emailing documents to lenders, receiving wire transfers. Each electronic communication can be charged as a separate count. We’ve seen San Diego prosecutors charge 15-20 wire fraud counts for single loan applications, each carrying 20 years maximum, creating theoretical exposure of 300-400 years designed to pressure defendants into guilty pleas rather than trials.

Money Laundering and Conspiracy

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 luxury vehicles, making large cash withdrawals, transferring funds offshore, or using proceeds for purposes prosecutors frame as personal rather than business-related. In cases involving multiple defendants, prosecutors add conspiracy charges under 18 U.S.C. § 371, making all conspirators responsible for the entire amount of fraud committed by any member, which dramatically increases exposure and creates enormous pressure to cooperate against co-defendants.

Defenses to PPP and EIDL Fraud Charges

The strongest defenses challenge prosecutors’ proof of intent. Federal fraud statutes require proof that you knowingly made false statements – not that you made good-faith errors or relied on incorrect advice from professionals. We build intent defenses by presenting evidence that you consulted accountants or business advisors 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 rollout 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 San Diego spanning years. We show you disclosed information to lenders voluntarily rather than concealing it, 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 to approval decisions. We hire forensic accountants who analyze applications and testify about whether alleged misstatements actually affected loan amounts or eligibility determinations.

Negotiating with San Diego Prosecutors

Assistant U.S. Attorneys in San Diego handle enormous PPP fraud caseloads, which creates both pressure to resolve cases efficiently and desire to secure convictions that demonstrate aggressive enforcement of pandemic fraud. We negotiate from positions of strength when possible: identifying weaknesses in government evidence, highlighting proof problems with intent or materiality, demonstrating that trials will be expensive and uncertain for prosecutors.

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 and sentencing outcomes. We also fight over loss amounts because they determine guideline ranges. Government claims $400,000 loss, we present evidence showing $160,000 was spent on legitimate business expenses like payroll and rent – reducing actual loss to $240,000 and lowering offense levels by 2-4 points, translating to years less incarceration.

San Diego Federal Sentencing

Federal judges in the Southern District of California are known for carefully considering individual circumstances but also taking fraud cases seriously, particularly pandemic fraud that they view as exploitation of programs designed to help struggling businesses during national crisis. Successful sentencing requires presenting compelling mitigation beyond just asking for leniency: demonstrating lack of criminal history, strong family and community ties throughout San Diego, acceptance of responsibility, rehabilitation efforts, charitable work, and the extraordinary economic pressures of the pandemic that created desperation rather than criminal greed.

We present letters from community members throughout San Diego County, employers, family, and religious leaders who vouch for your character. We hire experts who testify about economic conditions in your industry during 2020, showing that business owners faced unprecedented uncertainty and made desperate decisions under extreme pressure without criminal intent. We argue for alternatives to incarceration – probation, home confinement, community service – emphasizing that restitution and supervised release accomplish sentencing goals without destroying families and businesses.

Cooperation Agreements

When evidence is overwhelming, cooperation becomes an option – but requires extremely careful evaluation. Cooperation means providing information about others involved in fraud, testifying against co-defendants, and working with prosecutors to build cases against targets. The benefit is substantial assistance departures that can reduce sentences by 50% or more, sometimes resulting in probation even when guidelines call for significant prison time.

But cooperation carries serious risks. You must disclose all criminal conduct – not just charged offenses but everything you’ve ever done. If prosecutors discover you lied or withheld information, they’ll void your agreement and use your proffer statements against you at trial. You may need to testify, facing aggressive cross-examination designed to destroy your credibility. You face potential retaliation from co-defendants or others you testified against. For many defendants, cooperation isn’t realistic, and alternative strategies – accepting responsibility, demonstrating limited role, presenting powerful mitigation – become the path to favorable outcomes.

Pre-Indictment Intervention

If you become aware of an investigation early – because investigators contacted your bank, interviewed employees, or agents approached you for voluntary interviews – that’s the critical moment to hire experienced 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 with operations throughout San Diego.

Federal prosecutors in San Diego 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 charging decisions – fewer counts, lower loss amounts, reduced charges that carry less exposure.

What Spodek Law Group Does for San Diego Defendants

We defend PPP and EIDL fraud cases in San Diego 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 under federal law. 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 business practices. At trial, we cross-examine cooperating witnesses about their criminal histories and motivations to fabricate testimony in exchange for sentencing reductions. We present defenses focused on intent, materiality, and good-faith reliance on ambiguous guidance during unprecedented crisis.

At sentencing, we present mitigation packages showing your ties to the San Diego 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 mercy.

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 or EIDL fraud charges in San Diego, 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.