Constitutional Rights When Accused of PPP Fraud

When federal agents come asking about your Paycheck Protection Program loan, everything you thought you knew about your constitutional rights gets tested. At Spodek Law Group, we have represented clients across the country who found themselves facing PPP fraud allegations, and the single most dangerous thing we see is people relying on rights they think they have but do not actually possess.

The federal government has charged over 3,000 defendants with pandemic-related fraud. The conviction rate is staggering. And the constitutional protections that most people assume will save them? They work differently in federal court than what you have seen on television. Much differently.

If you are under investigation or have been contacted by federal agents about your PPP loan, you need to understand exactly what rights you have, when those rights apply, and what happens if you fail to invoke them properly. Todd Spodek and our team have built our practice around protecting clients at this exact moment, when understanding your constitutional protections means the difference between freedom and federal prison.

The Rights You Think You Have vs The Rights You Actually Have

Most people believe they understand their constitutional rights. You have the right to remain silent. You have the right to an attorney. Anything you say can be used against you. These are the words we have all heard a thousand times on television shows and in movies. And that’s where most people get it wrong.

The rights you’re familiar with from entertainment media are a simplified, dramatized version of a complex legal reality. In actual federal investigations, the protections you assume exist often don’t apply the way you think. Constitutional rights are not automatic shields that activate the moment someone accuses you of a crime. They require active, explicit invocation at the right time, in the right way.

Look, we get it. When an FBI agent or IRS investigator shows up at your door, the brain goes to what you’ve seen on Law and Order. You think as long as you dont say anything incriminating, protection kicks in. As long as you ask for a lawyer eventually, everything is fine. As long as you dont sign anything, you cant get in trouble.

The reality is far more nuanced and far more dangerous. Federal agents are trained interviewers who conduct dozens or hundreds of interviews each year. They are good at what they do. They are good at making people comfortable. There good at getting targets to talk. And once someone talks, those words become locked into the record forever.

Read that again. Thats the gap nobody explains. The gap between what you believe and what actually happens in federal court. That gap has destroyed more PPP fraud defenses then almost any other factor. Defendants who thought they were being smart by not saying anything damaging still ended up providing prosecution evidence. Defendants who thought silence protected them found that silence used against them at trial. Defendants who thought cooperation would help found that cooperation buried them.

The constitutional framework that protects criminal defendants is powerful. But it only works when you understand exactly how to invoke it, when to invoke it, and what mistakes to avoid. That understanding is the difference between clients who beat federal charges and clients who become part of that 97 percent conviction statistic.

What Miranda Actually Means in PPP Investigations

Here’s where it gets complicated. Miranda warnings, the famous “you have the right to remain silent” speech, only applies in one very specific situation. Custodial interrogation. That means you must be in custody and you must be being questioned. Both elements must be present.

The thing is, most PPP fraud investigations don’t start with custody. They start with a knock on the door. An agent who says they want to “clear up some questions” about the loan. Maybe they call a cell phone and ask if you have a few minutes. Maybe they show up at the business during working hours. Maybe they catch the target in a parking lot after work and ask to chat.

Your not in custody. Your just talking. That conversation becomes evidence.

This is the trap that catches most defendants. When federal agents conduct a non-custodial interview, they are not legaly required to give Miranda warnings. They don’t have to tell you that you have the right to remain silent. They dont have to tell you that anything said can be used in court. They dont have to offer an attorney.

Because technically, the person is free to leave. Technically, nobody is under arrest. Technically, this is just a conversation between adults. The fact that one adult has a badge and a gun and is trained in interview techniques designed to extract admissions doesn’t change the legal analysis. The fact that saying the wrong thing could lead to federal prison doesn’t make it a custodial encounter.

Courts have consistently held that a non-custodial interview remains non-custodial even when the person being interviewed feels pressure to cooperate. Even when agents are clearly investigating that specific person. Even when the stakes are obvious to everyone in the room. If someone is technically free to walk away, if they are not under arrest, Miranda doesn’t apply.

What does this mean practically? It means federal agents can show up at a home on a Saturday morning, sit in the kitchen, drink coffee, ask questions about PPP loans for an hour, and everything said is admissable evidence. They never had to tell anyone that talking could stop. They never had to explain counsel was available. They never had to warn about self-incrimination.

Here’s the thing nobody tells you. Both the target AND the agents want that first conversation to happen. Targets want to seem cooperative. They want to explain themselves. They want to clear up any misunderstandings. They want to prove they have nothing to hide. Agents want statements. They want admissions. They want to lock someone into a story that they can later contradict with documents and testimony.

Only one side is getting what they actually need from that conversation. And its not the target.

When agents say they want to “clear things up” or “hear the other side” thats not helpfulness. Thats a trained interview technique designed to get voluntary statements before lawyering up. Before warnings can be given. Before people understand whats actualy happening.

Why 97 Percent of Charged Defendants Lose

Ninety seven point four percent.

That is the conviction rate for the IRS Criminal Investigation division in prosecuted cases. The Department of Justice has an 81.8 percent conviction rate across all pandemic fraud prosecutions. These are not numbers designed to scare anyone. These are the actual statistics from federal enforcement data released in late 2024.

We wish we could tell you somthing different. We wish we could say these numbers are misleading or that cases will be exceptions. But the truth is more uncomfortable then that.

Once charged with federal PPP fraud, the odds are overwelmingly against defendants. The DOJ has charged 3,096 defendants with pandemic fraud. Of those, 2,415 entered guilty pleas. 117 were convicted at trial. Only a small fraction were aquitted or had charges dismissed. The guilty plea rate alone tells you how the system works. Defendants and their attorneys look at the evidence, look at the conviction rates, look at the sentencing guidelines, and make the mathamatical calculation that fighting is worse then pleading.

What happens after conviction? 81 percent of sentenced defendants in 2024 recieved prison time. Not probation. Not home confinement. Actual federal prison. The sentences are 40 percent longer then they were in 2021 and 2022, when judges were still figuring out how to handle pandemic fraud cases. The system has hardened.

The real question is not what happens after charges are filed. Its what happens before.

Most defendants hire attorneys after charges are filed. By then, the investigation is complete. The statements have been made. The documents have been collected. The witnesses have been interviewed. The grand jury has already voted. They’re fighting a war that’s already been lost.

The time to protect constitutional rights is during the investigation phase. Before charges. Before becoming a defendant. Before names appear in criminal complaints. When control over what evidence the government collects is still possible. When rights can still be invoked in ways that will actually be respected.

97.4 percent. Thats not justice. That’s math. The only way to beat those odds is to change the equation before it gets calculated. The only way to avoid becoming another statistic is to understand that the fight happens during investigation, not after indictment.

How Evidence Suppression Changed Everything in Federal PPP Cases

But prosecutors will tell you the evidence speaks for itself. They will say loan applications contain false statements. They will say bank records prove funds were misused. They will say the documents are clear and documentary evidence makes constitutional defenses irrelevant. They will point to the conviction rate and suggest that fighting is pointless.

OK, so here’s where it gets interesting. The Fourth Amendment hasnt gone anywhere. Evidence obtained through illegal search and seizure can still be supressed. And in federal fraud cases, suppression can be absolutly decisive.

If federal agents obtained evidence illegaly, without a proper warrant or in violation of constitutional rights, that evidence may be inadmissable. It doesnt matter how damning the documents are. It doesnt matter how clearly they prove fraud. If the government violated rights to get them, a court can exclude them from trial.

This is called the exclusionary rule. And while prosecutors hate it, the rule exists to ensure the government plays by its own rules. It exists to deter unconstitutional conduct. It exists to protect every Americans rights against government overreach.

Think about what happens in a typical PPP fraud case. Agents need to collect bank records. Loan applications from lenders. Busines documents including payroll records. Tax returns from the IRS. Financial statements. Emails about the loan. Communications with employees. Each of these collection points is an oportunity for constitutional violations. Improper subpoenas. Warrants without probable cause. Searches without proper authorization. Seizures that exceed warrant scope.

Federal agents are not perfect. There human. They make mistakes. Sometimes those mistakes are constitutional violations that can change the entire case.

of cases that go to trial result in acquittal with private counsel

of criminal appeals in NJ result in reversal or new trial

Statistics updated regularly based on latest available data

Returning items you didn't buy, using fake receipts, or 'wardrobing' (wearing and returning) isn't a minor issue – it's felony theft with serious consequences.

If you're under investigation for fraud, the government can freeze your assets before charging you. Having emergency funds in a separate name may be crucial.

Carl Delano Torjagbo went to trial on a $9.6 million PPP fraud case in 2025. He was convicted by a jury. He now faces up to 170 years in federal prison. The defendant in a similar case who pled guilty? Served under 5 years. Richard Nieto got 46 months for his PPP fraud and money laundering conviction. Trial is risky. But suppression motions can change the entire calculation by removing the evidence that makes trial risky.

Evidence obtained illegaly cannot be used. Period. That changes everything.

Prosecutors will argue that people who actually committed fraud shouldnt be able to hide behind constitutional technicalities. They will say the evidence is the evidence regardless of how it was obtained. But thats not how the law works. Constitutional protections are not technicalities. There fundamental rights. And when the government violates those rights, there are consequences.

The question is wheather defense teams know how to identify constitutional violations and fight to supress the evidence. Not every attorney does. Federal criminal defense is a specialized practice, and the nuances of Fourth Amendment suppression law require years of experience and specific expertise. The attorney who handles DUI cases or divorces is probly not equiped to litigate federal constitutional issues.

The 72 Hour Window That Determines Your Case

The clock started when they first made contact. Whether it was a target letter from a prosecutors office, a grand jury subpoena, a phone call from an agent, or an agent at the door, that moment began the window that will determine the case.

72 hours. That’s the window.

The decisions made in the next 72 hours after initial government contact will shape everything that follows. What gets said. Who gets talked to? What documents get touched. Whether explanations get attempted or whether rights get immediately invoked and counsel gets retained. Those decisions compound. Those decisions lock in.

Heres the kicker. Most people waste this window. They panic. They try to figure out whats happening. They call friends or family for advice. They search the internet looking for answers. They convince themselves its probly nothing serious. They tell themselves the government wouldn’t be investigating if there wasn’t a mistake. They wait until the next contact, and then the next, before they finally pick up the phone and call a lawyer.

By then, there playing defense. By then, statements have been made. Opportunities have been missed. The prosecution has what it needs to build its case.

After the 72-hour window closes, options narrow dramatically. Documents that could have been preserved properly might be gone. Statements that should never have been made are locked in. Witnesses who should have been contacted have allready talked to agents. The chance to control the investigation has passed.

What should happen in those 72 hours? First, do not speak to any government agent or investigator without counsel present. Not a single word beyond identifying information. If they ask questions, tell them counsel needs to be consulted first. Second, do not touch, destroy, move, or alter any documents related to PPP loans, businesses, or finances. Evidence destruction creates new felony charges that are often easier to prove then underlying fraud. Third, do not discuss the investigation with anyone, not friends, not family, not buisness partners. Anything said to anyone can potentially become evidence. Privilege only protects attorney communications. Fourth, call a federal criminal defense attorney immediately. Not tomorrow. Not after figuring out whats happening. Not after calming down. Now.

The 72 hours matter more than almost anything else. Those three days are when the architecture of the case gets built. Get the foundation right, and theres a chance. Get it wrong, and the rest of the case becomes about trying to fix unfixable mistakes.

How Spodek Law Group Protects Your Constitutional Rights

This is what we do. At Spodek Law Group, we have built our practice around one simple idea. Constitutional rights only work if there actively protected by attorneys who understand how federal investigations operate.

Todd Spodek and our team intervene early. We dont wait for charges. We dont wait for indictments. We dont wait until the case is built. We get involved during the investigation phase, when protection actually matters. When the decisions being made will determine whether charges ever get filed.

Look, we wont sugarcoat it. PPP fraud investigations are serious. The federal government has made pandemic fraud a priority, and there throwing considerable resources at prosecution. The DOJ extended the statute of limitations to 10 years, which means investigations will continue into the 2030s for loans obtained in 2020 and 2021. This is not going away.

But seriousness is not hopelessness. Constitutional protections exist. Fourth Amendment supression works when violations can be identified. Fifth Amendment rights can be invoked correctly when people know how. Sixth Amendment right to counsel applies. Due process protections matter. The government must follow its own rules, and when it doesnt, there are remedies availible to skilled defense attorneys.

What makes Spodek Law Group different then most firms? We understand the timing. We understand that pre-indictment representation is when outcomes are determined. We understand that talking to agents before hiring counsel destroyes more cases then any other single factor. We understand that constitutional rights require active assertion, not passive reliance.

Our attorneys have handled federal criminal defense cases for years. We know how FBI agents operate. We know how IRS Criminal Investigation builds cases. We know how prosecutors think. And we know how to use constitutional protections to change outcomes rather then just complain about violations after the fact.

Rights are not going to protect themselves. There are constitutional principles written on parchment that require active, skilled, aggressive assertion by attorneys who know exactly what they are doing. Without that assertion, the rights might as well not exist.

If you have been contacted by federal agents about a PPP loan, call 212-300-5196 now. Do not wait for charges. Do not try to handle this alone. Do not assume rights will automatically provide protection. Do not make the mistakes that 97 percent of defendants make.

The 72 hour window is closing. Constitutional rights are waiting to be invoked. But they need someone who knows how to invoke them properly, at the right time, in the right way.

Call Spodek Law Group at 212-300-5196. The conversation is confidential, and it may be the most important call ever made.

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Constitutional Rights When Your Accused of PPP Fraud

Federal Sentencing Guidelines for Bank Fraud (18 USC 1344)

*Results may vary depending on your particular facts and legal circumstances.

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