Wire Fraud vs Bank Fraud Charges in PPP Loan Cases: What’s the Difference?

Thanks for visiting Federal Lawyers. We’re a second-generation law firm managed by our lead attorney, with over 40 years of combined experience in federal criminal defense. If you’re facing federal charges for PPP loan fraud, prosecutors likely charged you with both wire fraud and bank fraud – and understanding the difference between these charges matters because it affects your defense strategy, plea negotiations, and potential sentencing.

This article explains wire fraud versus bank fraud, why prosecutors charge both offenses in PPP cases, and how we defend against these charges.

Wire Fraud: 18 USC 1343

Wire fraud is the most common federal fraud charge. The statute prohibits using wire, radio, or television communication in interstate or foreign commerce to execute a scheme to defraud.

“Wire communication” includes everything electronic – emails, phone calls, text messages, online applications, electronic bank transfers, internet activity. If you submitted your PPP application online, that’s wire fraud. If you received the loan via electronic transfer to your bank account, that’s wire fraud. If you sent emails discussing the loan application, that’s wire fraud.

Federal prosecutors love wire fraud charges because they’re easy to prove. They don’t have to show that you actually succeeded in defrauding anyone – just that you used electronic communications as part of a fraud scheme. Each email, each electronic transfer, each online submission can be charged as a separate count of wire fraud.

Wire fraud carries up to 20 years in federal prison per count. If the fraud affects a financial institution, the maximum increases to 30 years per count.

Elements Prosecutors Must Prove

To convict you of wire fraud, prosecutors must prove three elements beyond a reasonable doubt. First, you devised or participated in a scheme to defraud. Second, you acted with intent to defraud. Third, you used interstate wire communications in furtherance of the scheme.

The “scheme to defraud” is broadly defined. Submitting a PPP application with inflated employee counts is a scheme to defraud. Claiming your business existed before it actually did is a scheme to defraud. Misrepresenting your payroll costs is a scheme to defraud.

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“Intent to defraud” means you knowingly participated in the scheme with the purpose of obtaining money through false pretenses. Honest mistakes aren’t wire fraud – but prosecutors will argue that discrepancies between your application and IRS records show you knew the information was false.

Legal Scenario: What Would You Do?

Scenario

You submitted a PPP loan application during COVID and now realize some employee count numbers may have been inaccurate.

Could this be considered fraud?

Attorney's Answer

Inaccuracies in PPP applications can trigger federal fraud charges carrying up to 20 years in prison. However, honest mistakes differ from intentional misrepresentation. Documentation of your good-faith efforts is critical to your defense.

This is general information only. Contact us for advice specific to your situation.

Bank Fraud: 18 USC 1344

Bank fraud is a more specific charge that applies when you knowingly execute a scheme to defraud a financial institution or obtain money from a financial institution by false pretenses.