Understanding DOJ PPP Fraud Investigations: Timeline and Process

Thanks for visiting Spodek Law Group. We’re a second-generation law firm managed by Todd Spodek, with over 40 years of combined experience handling federal criminal cases. If the Department of Justice is investigating your PPP loan, you need to understand what you’re facing and how long this process takes. DOJ fraud investigations follow a specific timeline – and the decisions you make at each stage determine whether you face charges, what charges get filed, and how much prison time you’re looking at.

This article breaks down the DOJ investigation process from start to finish, explains what happens at each stage, and shows you where we can intervene to protect your rights and minimize criminal exposure.

How DOJ Investigations Start

The DOJ doesn’t randomly pick PPP loans to investigate. They receive referrals from other federal agencies – typically the SBA Office of Inspector General, the FBI, or IRS Criminal Investigation. Banks also report suspicious PPP loan applications to federal authorities through Suspicious Activity Reports.

In 2025, federal prosecutors are actively pursuing PPP fraud cases as an enforcement priority. Recent convictions include a Marietta man sentenced for a $9.6 million fraud scheme and fourteen defendants arrested for fraudulently obtaining over $25 million in COVID relief funds. The government has made it clear – they’re prosecuting these cases aggressively, and they’re going after borrowers who submitted false applications or misused loan funds.

Once a case gets referred to the DOJ, it gets assigned to a federal prosecutor who works with investigative agencies to build the case. That prosecutor decides whether there’s enough evidence to file criminal charges, what charges to bring, and whether to offer a plea agreement or take the case to trial.

Investigation Phase: What Prosecutors Are Doing

During the investigation phase – which typically lasts several months – federal prosecutors gather evidence to prove fraud beyond a reasonable doubt. They’re not trying to help you. They’re building a criminal case.

Prosecutors use grand jury subpoenas to obtain documents. Your bank, your lender, your accountant – everyone gets subpoenaed. They’re comparing your PPP application to IRS tax returns, Social Security wage data, state business registration records. They want to know if the employee count was accurate, if payroll costs were real, if your business existed when you claimed it did.

Grand Jury Proceedings

The DOJ presents evidence to a federal grand jury – citizens who decide whether probable cause exists to file charges. Grand jury proceedings are secret. You don’t attend, you don’t know what witnesses testified, you don’t see evidence presented.

Having an attorney early matters. If we’re representing you before the grand jury phase, we can sometimes negotiate with prosecutors to resolve the case without an indictment.

Target Letter: You’re About to Be Charged

Sometimes – but not always – prosecutors send a target letter before filing charges. A target letter informs you that you’re the subject of a grand jury investigation and gives you an opportunity to testify or provide information before an indictment.

Do not respond to a target letter without an attorney. Do not agree to testify before the grand jury without extensive preparation. Prosecutors aren’t giving you a chance to clear things up – they’re giving you an opportunity to provide evidence against yourself.

At Spodek Law Group, we use target letters as negotiation opportunities. We contact the prosecutor, we find out what evidence they have, we determine whether we can resolve the case without charges. Sometimes we can present evidence that convinces prosecutors not to indict. Other times we negotiate a plea agreement that limits your exposure and keeps you out of prison.

Indictment: Formal Criminal Charges

If the grand jury finds probable cause, they return an indictment – a formal document listing the criminal charges against you. PPP fraud indictments typically include multiple counts: wire fraud, bank fraud, making false statements to financial institutions, conspiracy to commit fraud.

Each count carries significant prison time. Wire fraud is 20 years per count. Bank fraud is 30 years per count. False statements to financial institutions under 18 USC 1014 is 30 years per count. Prosecutors stack charges to increase pressure to plead guilty.

After indictment, you’ll be arrested or asked to surrender to federal authorities. You’ll go through initial appearance, where a magistrate judge informs you of the charges and sets bail conditions. Most people charged with PPP fraud get released on bail with electronic monitoring and travel restrictions.

Timeline From Indictment to Trial

You’re looking at many months from indictment to trial. The Speedy Trial Act requires trial within 70 days, but defense attorneys routinely waive this to prepare the case.

During this time we’re negotiating with prosecutors, reviewing discovery evidence, interviewing witnesses, and preparing trial strategy. Most federal cases resolve through plea agreements. But having a strong defense gives us leverage to negotiate better terms.

Plea Negotiations and Trial

Federal prosecutors have enormous leverage. They control what charges get filed, whether they’ll recommend reduced sentences, whether they’ll let you plead guilty to lesser offenses. But leverage goes both ways when you have strong legal representation.

We negotiate plea agreements that minimize prison time and reduce charges. Sometimes we convince prosecutors to drop certain counts. Sometimes we negotiate cooperation agreements where you provide information about others involved in exchange for reduced sentences.

If we can’t negotiate an acceptable plea agreement, we take your case to trial. Todd Spodek is a second-generation criminal defense attorney who has handled hundreds of federal cases – including representing Anna Delvey in the case that became a Netflix series. We know how to cross-examine government witnesses, challenge documentary evidence, and create reasonable doubt.

Sentencing: What Prison Time You’re Facing

Federal sentencing uses guidelines that calculate prison time based on the amount of loss – how much money was fraudulently obtained or misused.

PPP fraud cases in 2025 are resulting in significant prison sentences. A Utah businessman received prison time for defrauding the program out of over $628,000. A Marietta man faces up to 170 years for a $9.6 million scheme.

We fight for reduced sentences by presenting mitigation evidence – your lack of criminal history, family circumstances, genuine remorse, restitution efforts. We argue for alternatives to incarceration when appropriate.

Why Timing Matters in DOJ Investigations

The earlier you involve us, the better your outcome. If we represent you during the investigation phase – before charges get filed – we can sometimes convince prosecutors not to indict. We present evidence, we negotiate pre-indictment resolutions, we cooperate in ways that satisfy the government’s interests without destroying your life.

Once you’re indicted, your options narrow. Prosecutors have less incentive to offer favorable plea deals because they’ve already invested resources in building the case. Judges have less flexibility at sentencing when cases go to trial and you’re convicted on multiple counts.

If the DOJ is investigating your PPP loan – or if you think you might be under investigation – contact Spodek Law Group immediately. We’re available 24/7, and we handle federal fraud cases across the country. Our team includes former federal prosecutors who understand exactly how these investigations work and what it takes to achieve the best possible outcome. Don’t wait until you’re indicted – by then it might be too late to avoid charges.