Is PPP Loan Fraud a Federal Crime? Yes – And That Makes Everything Worse!

Is PPP Loan Fraud a Federal Crime? Yes – And That Makes Everything Worse!

So your probably hoping that maybe PPP loan fraud is just some minor violation or civil matter that won’t really destroy your life. Maybe you think its like a traffic ticket or a business dispute that can be settled with a fine. Or maybe your wondering if its a state crime where the penalties might be lighter. Look, we get it. Your desperately clinging to hope that this isn’t as serious as everyone says. But here’s the gut-punch reality – PPP loan fraud is a FEDERAL CRIME, which means your facing the full power of the United States government with the harshest penalties possible!

Is PPP Loan Fraud Really a Federal Crime?

YES, absolutley YES, PPP loan fraud is 100% a federal crime! This isn’t some gray area or technicality – its black and white federal criminal law. The moment you submitted that fraudulent PPP application, you committed multiple federal felonies that can destroy your entire life!

Why is it federal? Because the PPP program was created by the federal government, funded with federal tax dollars, administered by federal agencies, and processed through the federal banking system. The CARES Act that created PPP is federal law. The Small Business Administration that approved your loan is a federal agency. The money came from the federal treasury. Everything about PPP is federal!

This isn’t like getting in trouble with your state – this is the UNITED STATES OF AMERICA versus YOU. Federal crimes mean federal investigators, federal prosecutors, federal judges, and federal prison. There’s no avoiding it, no transferring it to state court, no arguing jurisdiction. If you committed PPP fraud, you committed federal crimes, period!

What Makes It Federal Instead of State Crime?

The key thing that makes PPP fraud federal is something called “interstate commerce” – and before you get excited thinking your local business doesn’t involve interstate commerce, let us crush that hope right now. The federal government has jurisdiction over ANY financial transaction that crosses state lines, uses the internet, involves federal programs, or affects national banking.

Did you submit your PPP application online? That’s interstate commerce. Did the bank that processed your loan operate in multiple states? Interstate commerce. Did you use email, phone, or any electronic communication? Interstate commerce. Did the PPP funds come from the federal treasury? Federal jurisdiction. There’s literally NO WAY to argue PPP fraud isn’t federal!

Plus, the federal bank fraud statute specifically covers any fraud against a financial institution insured by the FDIC – which is basically every bank in America. The wire fraud statute covers any electronic transmission. The mail fraud statute covers anything sent through USPS. Every possible way you could have committed PPP fraud falls under federal jurisdiction!

Can You Also Face State Charges?

Here’s something that’ll make your situation even worse – you can face BOTH federal AND state charges for the same PPP fraud! Its not double jeopardy because federal and state are considered separate sovereigns. So you could go to federal prison, get out, and then go to STATE prison for the exact same conduct!

Many states are now bringing there own charges for PPP fraud. State attorneys general are prosecuting under state fraud statutes. If you submitted false documents to a state-chartered bank, that’s state fraud. If you violated state business laws, that’s additional charges. If you didn’t pay state taxes on forgiven PPP loans, that’s state tax fraud.

We’re seeing defendants get hit with federal charges for wire fraud, bank fraud, and conspiracy, PLUS state charges for theft, forgery, and tax evasion. One client faced 8 federal charges and 5 state charges for ONE fraudulent PPP loan! The state prosecutors wait to see what the feds do, then pile on there own charges. Your literally being attacked from multiple directions!

What Federal Laws Did You Break?

When you committed PPP fraud, you didn’t just break one federal law – you broke a whole bunch of them! Here’s the terrifying list of federal crimes your probably guilty of:

18 U.S.C. § 1014 – Making false statements to the SBA (30 years prison). This covers lying on your application, submitting fake documents, or misrepresenting anything about your business. 18 U.S.C. § 1343 – Wire fraud (30 years prison). If you submitted your application electronically or received funds electronically, that’s wire fraud.

18 U.S.C. § 1344 – Bank fraud (30 years prison, $1 million fine). Defrauding any FDIC-insured institution. 18 U.S.C. § 371 – Conspiracy (5 years prison). If anyone helped you or you helped anyone else. 18 U.S.C. § 1956 – Money laundering (20 years prison). Moving or spending fraudulent proceeds.

And that’s just the start! Add mail fraud if you mailed anything, identity theft if you used someone else’s information, tax fraud if you didn’t report properly, and the list goes on. Each law broken is a seperate federal crime with its own penalties that can be stacked on top of each other!

Why Is Federal Worse Than State Crime?

Federal crime is infinitely worse than state crime for so many reasons. First, federal sentences are LONGER. While state fraud might get you 1-3 years, federal fraud gets you 5-10 years or more. Federal judges follow strict sentencing guidelines that mandate harsh punishments. There’s no lenient county judges or sympathetic local juries.

Second, federal prison is HARDER time. No early release for good behavior like state prison – you serve at least 85% of your federal sentence. Federal prisons are often far from home, making family visits nearly impossible. The conditions are harsher, the inmates more dangerous, the rules more strict.

Third, federal prosecutors have UNLIMITED resources. While a local DA might have 50 cases, a federal prosecutor might have 5. They can spend months building your case, hire experts, conduct nationwide investigations. The conviction rate in federal court is over 95% because they have every advantage!

What Makes Federal Investigations Different?

Federal investigations are completely different from anything at the state level. Federal agencies like the FBI, IRS, and Secret Service have resources and powers that state agencies can only dream of. They can get warrants easier, subpoena records nationwide, freeze assets globally, and coordinate between multiple agencies.

Federal investigators also take there time. While state cases might be rushed, federal agents will spend YEARS building a case. They’ll gather every piece of evidence, interview every witness, analyze every document. By the time they arrest you, the case is already won. We’ve seen federal investigations where agents spent 18 months just on surveillance before making an arrest!

And here’s the scariest part – federal investigations are often SECRET. They can investigate you for years without you knowing. Grand juries meet in secret. Indictments can be sealed. You might be under investigation right now and have no idea until the FBI shows up at your door at dawn to arrest you!

Can Federal Charges Be Dismissed or Reduced?

The chances of getting federal PPP fraud charges dismissed are basically zero. Federal prosecutors have a 97% conviction rate because they don’t bring charges unless they’re absolutely certain they’ll win. Unlike state court where charges get dropped all the time, federal charges almost NEVER get dismissed.

Getting charges reduced is slightly more possible but still extremely difficult. Federal prosecutors might reduce 5 charges to 3, or agree to drop the money laundering if you plead to wire fraud. But your still facing serious federal felonies with mandatory prison time. They’re not reducing felonies to misdemeanors or offering diversion programs like state court might.

The only real “reduction” comes through cooperation – providing information about other fraudsters, testifying against co-defendants, helping recover stolen funds. But even then, your just reducing your sentence from 8 years to 5 years, not avoiding federal conviction. Once the federal government charges you, your basically guaranteed to become a federal felon.

What Federal Agencies Are Involved?

When you commit federal crimes like PPP fraud, your not dealing with one agency – your dealing with the entire federal law enforcement apparatus. The Department of Justice prosecutes. The FBI investigates. The IRS Criminal Investigation analyzes finances. The SBA OIG reviews loan documents. The Secret Service tracks money. The U.S. Marshals arrest you. Federal probation supervises you.

Each agency has its own agenda and adds its own charges. The FBI wants you for wire fraud. The IRS wants you for tax crimes. The SBA wants you for false statements. They’re not competing – they’re collaborating to bury you under as many federal charges as possible. Its like being hunted by an entire army where each soldier has there own weapon pointed at you.

And don’t forget the civil agencies! While criminal agencies are building prison cases, civil agencies like the Treasury and SEC are preparing massive financial penalties. You can face criminal prosecution AND civil lawsuits from multiple federal agencies simultaneously. Its a full-scale federal assault on every aspect of your life!

What’s Federal Prison Really Like?

Federal prison is nothing like state jail or what you see on TV. Your talking about facilities run by the Federal Bureau of Prisons with strict military-style discipline. You’ll be assigned a number, not a name. You’ll follow rigid schedules, wear uniforms, work prison jobs for pennies per hour.

You could be sent anywhere in the federal system – California, Texas, Colorado, West Virginia – thousands of miles from your family. Visits are limited and monitored. Phone calls are recorded and expensive. Email is censored. Your every move is watched, every conversation potentially reported.

And forget about safety. Federal prisons house everyone from white-collar criminals to terrorists to cartel leaders. Violence is common. Gangs run the yards. PPP fraudsters are seen as soft targets who stole money meant for struggling businesses. You’ll be extorted, threatened, possibly assaulted. Federal time isn’t just time – its survival.

WARNING: PPP fraud is a FEDERAL CRIME with FEDERAL PRISON!
97% conviction rate, 85% minimum time served, no mercy!
Call 212-300-5196 NOW before federal agents arrest you!

Look, we need you to understand this clearly – PPP loan fraud is absolutely, unequivocally a federal crime with federal consequences. Your not facing local police and county jail. Your facing the FBI, DOJ, IRS, and federal prison. The conviction rate is 97%. The sentences are measured in years, not months. Federal prison is dangerous and far from home.

This isn’t something you can handle yourself or hope goes away. The federal government has unlimited resources, a massive head start, and a burning desire to make examples of PPP fraudsters. They’ve extended the statute of limitations to 10 years specifically to hunt people like you. Every day you wait, there building a stronger case with more charges and longer sentences.

But there’s still hope if you act NOW with the right federal criminal defense team. We know federal prosecutors, federal judges, federal law. We’ve defended hundreds of federal cases and understand how to navigate this system. The difference between having experienced federal counsel and trying to handle this yourself is literally years of your life. Don’t wait until your in federal custody. Call us immediately at 212-300-5196 and let us start protecting you from the federal government’s wrath!