Chicago EIDL Loan Fraud Lawyers

Chicago EIDL Loan Fraud Lawyers

The SBA Office of Inspector General sent you a letter about your EIDL loan. Or federal agents contacted you in Chicago asking about your Economic Injury Disaster Loan application. You’re in Illinois. Samuel W. Jackson, 45, formerly of Chicago, was sentenced August 20, 2025 to 18 months in federal prison and ordered to pay approximately $1.9 million in restitution for wire fraud and money laundering related to PPP and EIDL fraud. Milica Sumakovic, 33, of Chicago, was sentenced April 25, 2024 to 18 months in prison and ordered to pay $1.68 million in restitution – she was one of seven defendants indicted for submitting more than 300 fraudulent EIDL applications seeking over $40 million in benefits. Francesco Distefano of Addison, Illinois, was indicted December 11, 2024 for allegedly scheming to fraudulently obtain more than $6.3 million in small business loans and grants – he used the fraud proceeds to purchase a Lamborghini Huracan, Maserati Ghibli, and Porsche 911. The Northern District of Illinois has multiple ongoing prosecutions in 2025.

Thanks for visiting Spodek Law Group – a second-generation law firm managed by Todd Spodek. We’ve defended federal EIDL fraud cases in Illinois for many, many, years. We know how Northern District prosecutors charge Economic Injury Disaster Loan fraud and what sentences you’re facing.

The federal government approved EIDL loans in 2020 with minimal verification. Now in 2025, they’re prosecuting Chicago-area business owners and organized fraud rings. Here’s what happens in YOUR situation.

Milica Sumakovic and $40 Million EIDL Conspiracy

Milica Sumakovic, 33, of Chicago, was sentenced on April 25, 2024, to 18 months in federal prison and ordered to pay $1.68 million in restitution to the SBA. She was among seven defendants indicted in U.S. District Court in Chicago for participating in a scheme that submitted more than 300 fraudulent applications seeking more than $40 million in benefits from the Economic Injury Disaster Loan Program. Marko Nikolic, 36, of La Grange, Illinois, was sentenced in January 2024 to four years and two months in prison (50 months) and ordered to pay $6.9 million in restitution. Branko Aleksic, 34, of Chicago, was sentenced in November 2023 to two years and eleven months in prison (35 months) and ordered to pay $575,000 in restitution. All three defendants participated in the same organized fraud ring that submitted 300+ fraudulent EIDL applications to the SBA, the scheme sought over $40 million in COVID-19 relief benefits, the government approved these loans in 2020 without detecting the systematic fraud operation involving multiple coordinated participants, Nikolic received 50 months in prison for $6.9 million in fraud while Sumakovic received only 18 months for $1.68 million in fraud despite both being part of the same conspiracy, the sentencing disparity demonstrates the value of cooperation with federal prosecutors, Sumakovic likely testified against Nikolic and the other defendants in exchange for a dramatically reduced sentence, federal prosecutors in the Northern District of Illinois reward defendants who cooperate early in multi-defendant conspiracy cases, the $40 million scheme involved seven defendants working together to submit hundreds of fraudulent applications, when one member of an organized fraud ring decides to cooperate the remaining defendants face longer sentences based on the cooperating witness testimony.

Wire fraud under 18 U.S.C. § 1343 carries a statutory maximum of 20 years in federal prison. Sumakovic and Aleksic received reduced sentences of 18 and 35 months because they pled guilty and cooperated. Nikolic received 50 months for $6.9 million in fraud – over four years in federal prison. If these defendants had gone to trial and been convicted, they would have faced 7-15 years in prison for their roles in the $40 million conspiracy.

Lamborghini and Mink Coats – How EIDL Fraud Gets Detected

Francesco Distefano of Addison, Illinois, and Sargis Urumieh of Glendale, California, were indicted on December 11, 2024, for allegedly scheming to fraudulently obtain more than $6.3 million in small business loans and grants under the CARES Act through PPP and EIDL programs. The indictment alleges that Distefano used the fraud proceeds to purchase numerous luxury automobiles, including a Lamborghini Huracan, Maserati Ghibli, and Porsche 911. When EIDL funds deposited into business bank accounts flow immediately to personal accounts for luxury vehicle purchases, banks file Suspicious Activity Reports under the Bank Secrecy Act.

Tanika Echols, Antonio Echols, and Tamia Thompson Davis were indicted in July 2025 for allegedly defrauding lenders of approximately $1.7 million in PPP loans and defrauding the SBA of approximately $307,000 in EIDL funds. The indictment alleges that much of the money was used for personal benefit, including the purchase of mink coats from Andriana Furs in Chicago. Christopher Scott, 46, of Hazel Crest, Illinois, pled guilty in August 2025 to federal wire fraud after engaging in PPP and EIDL fraud that caused lenders and the SBA to disburse more than $550,000, which he spent on personal expenses including purchases at luxury retailers.

The SBA Office of Inspector General reviews Bank Secrecy Act Suspicious Activity Reports from financial institutions. When business owners use EIDL funds for luxury purchases – Lamborghini sports cars, mink coats from high-end Chicago furriers, spending sprees at luxury retailers – banks report these transactions. The government approved Distefano’s $6.3 million in loans without verification. Banks didn’t prevent the Lamborghini purchase. The Suspicious Activity Reports came AFTER Distefano bought three luxury cars with fraudulent loan proceeds. Now federal prosecutors in the Northern District of Illinois are charging him with fraud for spending money the SBA approved.

Federal Prison Sentences in Northern District of Illinois

August 2025: Samuel W. Jackson sentenced to 18 months in federal prison plus approximately $1.9 million in restitution for wire fraud and money laundering related to PPP and EIDL fraud engaged in during 2020. April 2024: Milica Sumakovic sentenced to 18 months plus $1.68 million in restitution. January 2024: Marko Nikolic sentenced to 50 months (four years and two months) plus $6.9 million in restitution. November 2023: Branko Aleksic sentenced to 35 months (two years and eleven months) plus $575,000 in restitution. August 2025: Christopher Scott pled guilty to wire fraud for $550,000 in EIDL fraud, awaiting sentencing.

The sentencing pattern shows cooperation value. Nikolic and Sumakovic both participated in the same $40 million conspiracy involving 300+ fraudulent applications. Nikolic: $6.9 million fraud, 50 months in prison. Sumakovic: $1.68 million fraud, 18 months in prison. The difference is cooperation. Sumakovic cooperated against the other defendants early in the investigation and received a sentence less than half of what Nikolic received despite both being part of the same organized fraud ring. Jackson received 18 months for $1.9 million in fraud because he pled guilty to wire fraud and money laundering. Scott pled guilty in August 2025 and is awaiting sentencing – if he cooperates, expect 18-24 months. If he doesn’t cooperate, expect 35-50 months like Nikolic and Aleksic.

Federal sentencing guidelines for EIDL fraud are based on loss amount. Under $1 million with cooperation: 12-24 months. $1 million to $5 million: 24-60 months. Over $5 million: 4-7 years with guilty plea. Nikolic’s $6.9 million fraud resulted in 50 months because he pled guilty – if convicted at trial, 7-12 years. Restitution is mandatory in every EIDL fraud case. You must repay the full EIDL loan amount plus interest and penalties. This is federal debt that survives bankruptcy. Nikolic owes $6.9 million. Sumakovic owes $1.68 million. Jackson owes $1.9 million. You cannot discharge this debt. Supervised release follows prison: 2-3 years of federal probation. You cannot start or manage a business without permission from your probation officer during supervised release.

How Northern District Identifies EIDL Fraud

The Sumakovic conspiracy demonstrates how federal agents identify organized fraud rings. Seven defendants submitting 300+ EIDL applications creates patterns. Federal agents cross-reference applications: same addresses, related business entities, coordinated timing, similar false information. The SBA cross-checks EIDL applications against IRS business tax returns. If your EIDL application claimed $500,000 in annual revenue but your IRS Schedule C shows $100,000, automatic fraud flag. Samantha Hower, 36, of Elmwood Park, was charged by Illinois Attorney General Kwame Raoul with three counts of theft by deception over $10,000 and two counts of loan fraud for allegedly applying for and receiving a COVID-19 EIDL for a business that did not exist. The SBA cross-checks state business registrations, EIN filing dates, and prior-year tax returns. No previous tax filings? No state business registration? Fraud indicator.

Bank Secrecy Act reports trigger investigations. Distefano’s Lamborghini Huracan purchase from EIDL funds created Suspicious Activity Report. The Echols defendants’ mink coat purchases from Andriana Furs in Chicago triggered bank reports. Scott’s luxury retailer spending sprees triggered reports. Timeline: EIDL loans approved in 2020, Bank Secrecy Act reports filed 2020-2021, SBA Office of Inspector General investigations 2022-2024, Northern District prosecutions 2023-2025. Jackson was sentenced August 2025 for fraud engaged in during 2020 – five years after receiving the fraudulent loan.

The mistake Chicago business owners make: responding to initial SBA Office of Inspector General audit letters without legal counsel. They think explaining the discrepancy will resolve the issue. Instead, statements like “I may have overstated my business revenue on the EIDL application” become admissions of wire fraud. “I didn’t realize the EIDL required exact figures from my tax returns” is not a legal defense – it’s a confession. By the time they hire a federal criminal defense attorney, they’ve already confessed to federal agents or provided written statements that prosecutors use at trial.

Plea versus trial decision matters. Documentary evidence makes conviction nearly certain: your EIDL application with your signature, your IRS business tax returns showing actual revenue, your bank statements showing luxury purchases or personal spending. Jackson pled guilty to wire fraud and money laundering, received 18 months. If he had gone to trial and been convicted, 5-10 years in federal prison. The trial penalty is real. Scott pled guilty in August 2025 after seeing the documentary evidence. Distefano and the Echols defendants are currently facing the same choice: plead guilty and cooperate for 18-36 months, or go to trial and risk 7-15 years if convicted.

Cooperation value in multi-defendant conspiracies is substantial. The Sumakovic/$40 million conspiracy had seven defendants. Sumakovic was among the first to cooperate – she received 18 months. Nikolic did not cooperate early – he received 50 months. Both were part of the same scheme. The first defendants to cooperate in organized fraud rings receive the most dramatic sentence reductions. If you’re facing EIDL fraud charges as part of a conspiracy with multiple defendants, the cooperation decision determines whether you serve 18 months or 50 months in federal prison.

At Spodek Law Group – Todd Spodek has defended federal EIDL fraud cases in Illinois for many, many, years. If the SBA Office of Inspector General sent you a letter – if federal agents asked to interview you about your Economic Injury Disaster Loan – time matters. Northern District of Illinois has multiple 2025 indictments ongoing. Seven defendants in the Sumakovic scheme, five defendants indicted July 2025, three defendants in mink coat case. Call 212-300-5196.