Fresno EIDL Loan Fraud Lawyers

Fresno EIDL Loan Fraud Lawyers

You got contacted about your EIDL loan. Not your PPP loan – your Economic Injury Disaster Loan, the one with the $10,000 advance SBA called a “grant.” You’re in Fresno, Central California’s agricultural hub, which means you’re prosecuted in Eastern District of California federal court – covering Fresno, Sacramento, Bakersfield, Modesto, the entire Central Valley where agricultural businesses and agricultural support services scrambled for pandemic relief without always understanding the complex eligibility rules SBA kept changing. FBI Sacramento field office or SBA Office of Inspector General contacts you three years after you received the funds, asking about revenue figures that don’t match your tax returns, employee counts that appear inflated, whether you actually operated the business you claimed existed. Thanks for visiting Spodek Law Group – a second-generation law firm managed by Todd Spodek. We’ve represented clients in federal fraud prosecutions for over 40 years, many, many, EIDL and PPP cases across California including Eastern District prosecutions in Fresno federal court.

The Grant Trap

Most Fresno agricultural businesses understand this sequence, particularly those in Central Valley where seasonal agricultural operations and agricultural support services dominate the commercial landscape and businesses operate with revenue tied to growing seasons and harvest cycles that make consistent income projection nearly impossible during normal times, much less during pandemic chaos. They applied for EIDL through SBA’s online portal in 2020 or 2021, during peak pandemic uncertainty when normal agricultural operations had ceased or shifted dramatically and revenue projections became impossible to calculate with precision for businesses dependent on seasonal agricultural cycles. They provided revenue information showing their business income, employee counts documenting their workforce size, basic business details about their operations and industry classification. SBA processed the application through their automated system. Within days or sometimes weeks, $10,000 appeared in their business bank account – the EIDL advance, deposited directly by SBA without requiring additional documentation or approval steps. SBA documentation explicitly called it a “grant” in all official communications, explicitly stated they didn’t have to repay it even if their EIDL loan application was subsequently denied or if they decided not to accept the full loan amount, positioning it as emergency pandemic relief that was separate from and independent of the loan approval process. That language, that explicit characterization by SBA itself calling the advance a “grant” and saying it was non-repayable, created confusion federal prosecutors in Eastern District of California now deliberately exploit in Fresno prosecutions. When Eastern District prosecutors charge EIDL fraud in Fresno and throughout Central Valley, they’re looking at whether your application contained false information at the time you submitted it. False revenue figures – you claimed $260,000 annual revenue but tax returns filed with IRS show $175,000 in actual gross receipts. Inflated employee counts – you listed 18 employees when you actually had 11 W-2 workers on payroll. Fake businesses that never actually operated – you created a business entity specifically to apply for EIDL funds without conducting legitimate business operations or generating real revenue. Here’s the trap that catches most Fresno EIDL defendants, and it’s devastatingly common across Eastern District prosecutions throughout Central Valley agricultural region. They received the $10,000 EIDL advance – SBA documentation specifically called it a grant in every communication, explicitly said they didn’t have to repay it regardless of their loan status, positioned it as emergency relief separate from the loan itself. So when FBI Sacramento field office contacts them three years later about discrepancies in their EIDL application, they genuinely and reasonably believe “but I only got the $10,000 grant, not the full EIDL loan, and grants don’t need to be repaid by definition, and SBA itself officially called it a grant in their documentation, so how is there fraud?” That reasoning, though seemingly logical to defendants who relied on SBA’s own characterization, doesn’t work as a legal defense in federal court. If your EIDL application contained false information at the time you submitted it – revenue you claimed didn’t match your tax returns filed with IRS, employees you listed didn’t exist on your payroll records – that $10,000 advance counts toward loss calculation for sentencing purposes under federal sentencing Guidelines that federal judges must follow. Federal prosecutors throughout Eastern District don’t care that SBA called it a grant in their official documentation. What matters under 18 USC Section 1343 wire fraud statutes is that you obtained $10,000 from the federal government based on false statements transmitted electronically through SBA’s online application system across state lines. Each Fresno case prosecuted under identical federal wire fraud statutes, regardless of SBA’s characterization of the advance as a grant.

EIDL Fraud

You estimated your revenue because your Fresno agricultural business’s books weren’t perfectly organized during the pandemic chaos. Your Central Valley agricultural business had seasonal income tied to harvest cycles in 2019, or you operated agricultural support services with volatile monthly revenue, or your business structure made revenue calculation difficult. You included employee count that wasn’t exact because you had seasonal workers who came and went, contractors who performed essential agricultural functions. You made calculation errors on the application that resulted in a larger EIDL loan than you technically qualified for under SBA’s formula. Fresno agricultural business owners ask the same question – when does estimate become fraud? That’s the constitutional question at the center of every EIDL prosecution. Federal prosecutors must prove criminal intent under federal sentencing Guidelines. They must demonstrate you knew the information was false when you submitted it. Wire fraud carries 20 years maximum. False statements to SBA under 18 USC Section 1014 carry 30 years maximum. Those statutory maximums are meaningless – federal sentencing operates through mandatory Guidelines based on loss amount, not statutory maximums. But the constitutional burden remains.

FBI Sacramento agent calls or shows up at your business in Fresno. “We’re reviewing your EIDL application and need to verify some information.” That sounds like routine verification. It’s federal criminal investigation designed to obtain statements proving criminal intent. When Fresno business owners respond without federal defense counsel, investigators already possess their complete financial history. They subpoenaed bank records months earlier, pulled tax returns through IRS summons, obtained the original EIDL application from SBA’s database, examined state business records filed with California Secretary of State.

They know the discrepancies.

You received $150,000 EIDL loan plus the $10,000 advance. Your application claimed revenue that was off by $65,000 from what your tax returns documented. How much prison time are you facing in Eastern District? Federal sentencing operates through mandatory Guidelines based on loss amount. Loss amount in EIDL cases equals the loan amount you obtained through fraudulent application – including that $10,000 advance even though SBA called it a non-repayable grant. Small EIDL fraud, $10,000 to $50,000 including that advance, typically produces probation to 18 months imprisonment for first-time offenders. That $10,000 EIDL advance by itself, if obtained through fraudulent application, puts you in this sentencing bracket. Medium EIDL fraud, $50,000 to $250,000, results in 18 to 36 month sentences. Your $160,000 total falls in this bracket. Three factors determine where you land within your Guidelines bracket. Loss amount matters most. Criminal history matters second. Acceptance of responsibility matters third. 81% of pandemic fraud defendants sentenced as of December 2024 received prison time, not probation, according to Department of Justice data. Todd Spodek has defended federal fraud prosecutions for over 40 years. Call 212-300-5196.