Billings PPP Loan Fraud Lawyers

Billings PPP Loan Fraud Lawyers

Your PPP loan was flagged for audit. Federal agents contacted you about your Paycheck Protection Program application. Or your bank froze your account due to SBA investigation. You’re in Montana. A Helena woman was sentenced to 1 year and 1 day in prison for bank fraud in a COVID-19 relief scheme involving more than $400,000 in PPP loans. A Billings-area man was sentenced to 30 months in prison for a scheme to receive more than $1 million in PPP loans. The District of Montana prosecutes aggressively.

Thanks for visiting Spodek Law Group – a second-generation law firm managed by Todd Spodek. We’ve defended PPP fraud cases in Montana for over 40 years. We know how District of Montana prosecutors charge pandemic loan fraud and what outcomes you’re facing.

The SBA approved your PPP loan in 2020 – sometimes in 24 hours – without verification. Now they’re prosecuting. A Laurel man – just outside Billings – was sentenced to 5 years probation for attempting to fraudulently obtain $35,000 from the PPP program. Here’s what happens in YOUR situation.

Helena Woman Sentenced for $400,000 PPP Fraud

Kasey Jones Wilson, a Helena woman, was sentenced on March 23, 2022 to one year and one day in prison for bank fraud in a COVID-19 relief scheme. Wilson pleaded guilty in November 2021 before U.S. District Judge Brian M. Morris. Wilson and her co-conspirator Trevor Gene Lanius-McLeod applied for and received four PPP loans totaling $1,043,000 through Valley Bank of Helena on behalf of four business entities. They made numerous false statements about having paid payroll taxes and having employees. Wilson was convicted of bank fraud under 18 U.S.C. § 1344, which carries a statutory maximum of 30 years in prison. She received 1 year and 1 day because she pled guilty and cooperated.

Trevor Gene Lanius-McLeod was sentenced on June 7, 2022 to 30 months in prison for lying in the same scheme to receive more than $1 million in PPP loans. Lanius-McLeod pleaded guilty in December 2021 to bank fraud and engaging in monetary transactions in property derived from specified unlawful activity. The government alleged that from about April 2020 to December 2020, the defendants applied for and received four PPP loans totaling $1,043,000, making numerous false statements. Compare sentencing: Wilson cooperated early and received 13 months. Lanius-McLeod cooperated later and received 30 months. Early cooperation matters significantly.

Matthew Jason Welch, 37, of Laurel – a Billings suburb – admitted attempting to illegally obtain $35,000 from the Paycheck Protection Program. Welch pleaded guilty to wire fraud, facing a maximum of 20 years in prison, a $250,000 fine and three years of supervised release under 18 U.S.C. § 1343. Mr. Welch was sentenced to 5 years of probation on June 15, 2021. The smaller fraud amount ($35,000 versus $1 million) and early guilty plea resulted in probation instead of prison.

How PPP Fraud Gets Detected

PPP fraud detection is algorithmic. Every PPP application was cross-referenced against IRS Form 941 quarterly payroll tax returns. You claimed 15 employees on your PPP application. Your 941s show 3 employees. Computer flagged you immediately. The SBA Office of Inspector General reviews flagged applications and refers suspected fraud to federal law enforcement. In Montana, FBI handles PPP investigations, often working with IRS Criminal Investigation when tax fraud is involved.

Bank Secrecy Act reports trigger investigations. When you withdrew large cash amounts, made luxury purchases, or transferred PPP funds to personal accounts – your bank filed Suspicious Activity Reports. Those go directly to federal law enforcement. Wilson and Lanius-McLeod’s scheme involved four fraudulent business entities applying for $1,043,000 – those multiple applications from related entities flagged the fraud. Loan forgiveness applications create second fraud exposure. When you applied for forgiveness, you certified PPP funds went to payroll, rent, utilities. Federal agents subpoena bank records and trace every dollar. If funds went to personal expenses instead of permitted uses – that’s wire fraud when you certified the opposite on forgiveness applications.

District of Montana Sentencing

PPP fraud sentencing follows the federal guidelines based on loss amount. Under $100,000 with cooperation: 6-18 months. $100,000-$500,000: 2-4 years. $500,000-$1 million: 4-7 years. Over $1 million: 5-10 years with plea, 10-20+ years if convicted at trial. Wilson received 13 months for her role in a $1 million scheme because she pled guilty early and cooperated. Lanius-McLeod received 30 months for the same scheme but cooperated later. Welch received probation for attempting to obtain $35,000 with early guilty plea.

Restitution is mandatory – you must repay the full PPP amount plus interest. This federal debt survives bankruptcy. Wilson and Lanius-McLeod owe restitution on the $1,043,000 fraudulently obtained. Probation terms after prison: 3-5 years supervised release, cannot start/manage a business without permission, continuous financial monitoring. The critical decision: plea deal versus trial. Federal PPP fraud cases have 97%+ conviction rates at trial. Documentary evidence – your application, your IRS records, your bank statements – makes conviction nearly certain. The “trial penalty” means if you’re convicted at trial, you face statutory maximums instead of reduced plea sentences. Both Wilson and Lanius-McLeod pled guilty and avoided trial – their sentences would have been 2-3 times longer if convicted at trial.

Timeline: From initial SBA contact to indictment typically runs 6-18 months. District of Montana prosecutors build overwhelming cases before filing charges. By the time you’re indicted, they have everything – bank records, IRS filings, witness statements. The mistake Montana business owners make: responding to initial SBA audits without legal counsel. They think explaining will resolve it. Instead, statements like “I may have inflated payroll numbers” become admissions of fraud. By the time they hire an attorney, they’ve confessed.

At Spodek Law Group – Todd Spodek has defended federal fraud cases for many, many, years. If the SBA contacted you about your PPP loan – if federal agents asked to interview you – time matters. District of Montana prosecutes aggressively. Call 212-300-5196.