Albuquerque PPP Loan Fraud Lawyers

Albuquerque PPP Loan Fraud Lawyers

Your bank froze your account. The SBA is auditing your PPP loan. Or federal agents – FBI, Homeland Security Investigations – contacted you asking about your Paycheck Protection Program application from 2020. You’re in Albuquerque and you’re scared. How did they find out? What happens now?

Thanks for visiting Spodek Law Group – a second-generation law firm managed by Todd Spodek. We’ve represented clients facing federal PPP fraud investigations for over 40 years of combined experience. We know exactly how the government detects PPP fraud, how these investigations work in New Mexico federal court, and what outcomes you’re actually facing.

The SBA approved your PPP loan in 24 hours without asking a single follow-up question. Now in 2025, they’re prosecuting Albuquerque business owners for applications the government itself greenlit. That’s not fraud investigation – that’s retroactive prosecution enabled by algorithmic surveillance.

Automated Detection

PPP fraud detection isn’t manual review. It’s algorithmic. Every PPP application was automatically cross-referenced against IRS records – specifically your Form 941 quarterly payroll tax returns. The computer flagged discrepancies. You claimed ten employees on your PPP application, your 941 forms showed two employees. The algorithm flagged you immediately. Take the Albuquerque case from 2023: three residents were indicted for obtaining over $1 million in PPP loans by submitting applications for defunct companies with fabricated payroll data. The SBA’s fraud detection system caught them because the businesses listed didn’t exist in IRS records. Investigators compared the fabricated 941s against actual IRS filing records and found no match. Other triggers include Bank Secrecy Act reports. When you withdrew large amounts of cash, made luxury purchases, or transferred PPP funds to personal accounts – your bank filed Suspicious Activity Reports. Those reports go directly to federal law enforcement. The Albuquerque defendants chartered a private jet from Albuquerque to Las Vegas and hired a mariachi band using PPP funds. Their bank flagged the transactions. Whistleblowers also report PPP fraud. Competitors who know your business doesn’t have the employees you claimed. The SBA Office of Inspector General operates a fraud hotline, and whistleblowers can receive rewards up to $1 million. Loan forgiveness audits trigger investigations when your bank records show personal credit card payments or other non-payroll expenses after you certified the funds went to payroll.

From Audit to Criminal Case

An SBA administrative audit is civil. A criminal investigation means federal prosecutors are building a case for wire fraud charges carrying 30 years in prison.

Stage one: SBA sends an audit letter requesting documentation. If you respond explaining “I may have overestimated the number of employees” – those statements get flagged as potential fraud. The case gets referred to SBA Office of Inspector General. Stage two: SBA OIG determines potential criminal fraud exists and refers to federal law enforcement. Stage three: Federal agents subpoena your financial records, interview employees and business partners, and build a case for wire fraud and bank fraud under 18 U.S.C. § 1014. Both carry maximum sentences of 30 years.

The timeline runs 6-18 months. The critical mistake is responding to the initial SBA audit without consulting a federal criminal defense attorney. Their statements during the “audit” phase become evidence when the case escalates.

You Signed Under Penalty of Perjury

The PPP loan application includes a borrower certification: “The information I have provided is true and correct.” Signed “under penalty of perjury.” Federal prosecutors use your signature to establish you knew the information when you submitted it. Many want to claim “my accountant filled out the application.” That defense fails when the numbers are materially false. If you claimed 25 employees but actually had 3, federal prosecutors argue you must have known that was false when you signed.

The reliance-on-advisor defense can work: (1) you provided accurate information to your accountant, (2) your accountant was a licensed professional, (3) you reasonably relied on their expertise, and (4) the errors were not obviously false. Federal prosecutors focus on recklessness. Did you review the application before signing? The Albuquerque defendants allegedly used fake companies and fabricated payroll data, then spent the money on private jets and parties.

The statutory maximum: 30 years for wire fraud, 30 years for bank fraud. Here’s what actually happens in Albuquerque federal court based on federal sentencing guidelines. Sentencing is calculated by the loss amount. Under $50,000 with cooperation: probation is possible, though judges in 2025 are including some prison time even in smaller cases. Between $50,000 and $150,000: expect 6-18 months in federal prison plus supervised release. Over $150,000: 2-5 years is typical for first-time offenders who plead guilty. The Albuquerque defendants charged with over $1 million are realistically facing 5-10 years with a plea agreement, or 15-20 years if convicted at trial. The difference between plea and trial sentences is enormous – 97% of federal defendants plead guilty. Restitution is mandatory. You must pay back the full loan amount plus interest and penalties. This debt survives bankruptcy and follows you for decades. Probation terms are severe: supervised release lasts 3-5 years, you cannot start or manage a business without permission, your finances are monitored, internet use can be restricted. Almost nobody goes to trial because the evidence is documentary – your PPP application, your bank records, your IRS filings, all contradicting each other.

At Spodek Law Group – Todd Spodek is a seasoned criminal defense attorney with many, many, years of experience defending federal investigations. If the SBA contacted you about your PPP loan – if federal agents asked to interview you – time matters. Call 212-300-5196.