Aggravated Identity Theft Charges in PPP Fraud Cases

If you are reading this at two in the morning because you just learned that your PPP fraud case now includes aggravated identity theft charges, you are not alone. At Spodek Law Group, we have seen this exact scenario play out hundreds of times. Someone applies for a PPP loan, makes mistakes on the application, and suddenly faces charges that carry mandatory prison time that cannot be reduced or negotiated away. The fear you are feeling right now is completely rational because this charge changes everything about your case.

Here is what most lawyers will not tell you upfront: aggravated identity theft under 18 USC 1028A is not primarily about protecting identity theft victims. It is a prosecutorial tool designed to force guilty pleas. Federal prosecutors have learned that defendants who would fight a five year fraud charge will plead instantly when facing that same charge plus two years plus two years plus two years for each identity used. The math becomes impossible to fight. That is why they add this charge to nearly every PPP fraud prosecution now.

But something changed in June 2023. The Supreme Court decided a case called Dubin v. United States that most defense attorneys have not incorporated into their strategy yet. This case narrowed the scope of aggravated identity theft in ways that could eliminate the charge entirely in certain PPP cases. If your lawyer has not mentioned Dubin to you, that is a problem. If they do not know what Dubin means for your case, that is an even bigger problem.

What Aggravated Identity Theft Actually Means in Federal PPP Cases

Aggravated identity theft under 18 USC 1028A sounds like it would apply to someone who steals your social security number and opens credit cards in your name. That is what most people think when they hear the term. But the statute is far broader than that, and that is exactly why prosecutors love it.

OK so let us break this down in a way that actually makes sense. Traditional identity theft involves stealing someone's personal information to commit fraud against THEM. You take their credit card number and buy things. You open accounts in their name. The victim is the person whose identity you stole. Aggravated identity theft under federal law works completely differently. The victim of the underlying crime does not have to be the person whose identity was used. In PPP fraud cases, the victem is the government or the bank, not the people whose names appeared on your application. This distinction confuses almost everyone including some lawyers.

The law says that anyone who knowingly transfers, posseses, or uses without lawful authority a means of identification of another person during and in relation to certain felonies faces a mandatory two year prison sentence. Read that again. Means of identification. Not stolen identity. Not fraudulent identity. Just means of identification.

What counts as a means of identification? Social security numbers. Employer identification numbers. Names. Dates of birth. Drivers license numbers. Even email adresses in some interpretations. If you used any of these belonging to another person during your PPP fraud, prosecutors will argue you commited aggravated identity theft.

99%. That is the percentage of 1028A convictions that result in prison time. Not probation. Not home confinment. Federal prison. The average sentence for someone convicted only of 1028A is 25 months. When combined with other charges like the fraud charges your probly facing, that average jumps to 54 months. And heres the part that realy matters: this time runs consecutive to your other sentence. It cannot run at the same time.

Let that sink in for a moment. If you are facing five years for wire fraud and the government adds aggravated identity theft, you are not looking at five years anymore. You are looking at five years plus two years minimum. And it gets worse from there.

Why Prosecutors Add This Charge to Every PPP Case

The charge is not really about identity theft at all. It is about leverage. Federal prosecutors learned something important during the wave of PPP fraud prosecutions: defendants who might be willing to fight a fraud charge will fold completely when facing stacking identity theft counts.

Look at the numbers. The DOJ COVID-19 Fraud Enforcement Task Force has charged more than 3,500 defendants with federal crimes related to pandemic relief fraud. They have recovered more than 1.4 billion dollars. They have five dedicated strike force units across the country focused on nothing but these cases. This is not a casual enforcement effort. This is a coordinated, well funded campaign to prosecute everyone who touched PPP money improperly.

Think about what this means for your negotiating position. Without the 1028A charge, your lawyer might argue for probation or home confinement based on first time offender status, cooperation, or mitigating circumstances. Judges have discretion in those situations. They can consider your background, your family situation, whether youve payed restitution.

But once 1028A is on the table, all that discretion disapears for at least two years of your sentence. The judge cannot reduce it. The prosector cannot waive it as part of a plea deal without dropping the charge entirely. Its a floor that cannot be lowered no matter what you do.

Ask any federal prosecutor off the record and they will admit it. 1028A is the closer. Its the charge that makes the math impossible. Once its on the table, defendants stop fighting and start negotiating for whatever crumbs they can get.

Heres the thing though. The government dosent add this charge because they actualy care about identity theft victems. They add it because it works. It forces pleas. It clears cases. It makes their conviction statistics look better. The system is working exactly as designed, just not in your favor.

The Stacking Nightmare: How Two Years Becomes Twenty

And heres the part that keeps defense attorneys up at night. Heres were the real terror lives.

WARNING: Each identity used is a seperate count.

Thats not two years total. Thats two years PER IDENTITY. If you listed five fake employees on your PPP application to inflate your payroll numbers, thats potentialy ten additional years running one after another. If you used ten names? Twenty years. And the judge cant do anything to reduce it.

Do the math yourself. Say your facing a base wire fraud charge that carries a sentencing guidline of three to four years. Reasonable. Your lawyer might argue for the low end, might get probation if youve cooperated and paid restitution. But now add five counts of aggravated identity theft. Thats three years plus two plus two plus two plus two plus two. Thats thirteen years minimum. And remember, judges cannot adjust the underlying sentence to compensate for the mandatory 1028A time. The statute specifically prohibits it.

This is why defendants who were prepared to fight their fraud charges suddenly plead guilty when the superseding indictment drops. Its not because their guilty of identity theft in any meaningful sense. Its because the mathematical reality of fighting becomes impossible to justify.

Rahul Shah learned this the hard way. The Illinois buisness owner was convicted of fraudulently obtaining over 55 million dollars in PPP funds. He used stolen identities and falsified documents. The jury found him guilty of bank fraud, false statements, money laundering, AND aggravated identity theft. He now faces up to 30 years per count of bank fraud PLUS two years per count of identity theft. The stacking is devestating.

A Florida man received a five year prison sentence in March 2024 for two counts of wire fraud, two counts of aggravated identity theft, and one count of theft of government property. Five years. For a PPP fraud case that many people would consider relatively small compared to the Shah case. The aggravated identity theft counts added mandatory time that the judge could not reduce no matter how much he wanted to. These cases keep happening. The sentances keep getting longer.

WARNING: The statute of limitations was extended to ten years in 2022.

Most people do not realize the government is still building cases. They have until 2032 to charge people who committed PPP fraud in 2020-2022. Every day that passes, more evidence accumulates, more co-conspirators cooperate, more patterns emerge. The investigation into your conduct may have started years ago without your knowledge.

The 2023 Supreme Court Case Most Lawyers Do Not Know About

In June 2023, something happened that changed everything. The Supreme Court decided Dubin v. United States, and it fundamentally altered what aggravated identity theft means under federal law.

David Dubin worked for a psychological services company that overbilled Medicaid by $338. Not 338 thousand. Not 338 million. Three hundred thirty eight dollars. The government charged him with healthcare fraud and aggravated identity theft because the billing included a patients identifying information.

The Supreme Court said no. Unanimously. Nine to zero.

The Court held that identity use must be "at the crux of what makes the conduct criminal." Not merely present. Not incidental. At the crux. The identity theft charge only applies when the "means of identification itself plays a key role" in the fraud.

This matters enormusly for PPP cases. Think about your situation. Was the identity use at the crux of your fraud, or was it incidential? If you inflated your business revenue and happened to include real employee social security numbers on the application, the identity use might have been incidental. The crux of the fraud was lying about revenue, not stealing identity.

Justice Sotomayor, writing for the unanimous Court, explained that the statute should be interpreted to cover situations where the means of identification itself plays a key role rather than being automatically applied to every fraud offense that happens to involve personal information. This is not a minor technicality. This is the Supreme Court of the United States telling federal prosecutors they have been using this statute too broadly for years. And most defense attorneys still have not figured out how to use this ruling to help their clients.

When lawyers say they handle federal fraud cases, ask them specifically about Dubin. If they do not know the case, they have not updated their playbook since 2023. Thats not a lawyer you want arguing about wheather identity use was at the crux of your conduct. Todd Spodek and the team at Spodek Law Group have been tracking post-Dubin developments since the day the decision dropped.

The Dubin defense does not work for everyone. But for the right cases, it can eliminate the mandatory 1028A sentence entirely. Thats not reducing the sentence. Thats making it disapear.

When the Dubin Defense Works and When It Does Not

Not every PPP case fits the Dubin framework. Heres were you need to be honest with yourself about what actually happened.

The Dubin defense works best when the identity use was genuinly incidental to the fraud. Examples where it might apply: you inflated your business revenue but used real employee information accurately. You exagerated your payroll costs but the employees actually existed. You made false certifications about how you would use the funds but did not fabricate people who do not exist.

In these cases, the crux of the fraud was the lie about revenue or payroll or intended use. The identities were present but not central. A skilled defense attorney can argue that under Dubin, the 1028A charge should not apply because identity theft was not at the heart of the scheme.

The Dubin defense is weaker when the identity itself was the mechanism of fraud. If you created ghost employees who never existed, the government will argue that fabricating those identities WAS the crux. Without the fake people, there was no inflated payroll to justify the loan amount. The fraud and the identity use were inseperable.

Heres the critical question you need to answer: was the fraud ABOUT stealing identity, or was identity just PRESENT in the fraud? The distinction is everything.

Spodek Law Group evaluates every PPP case specifically through the post-Dubin lens. We look at exactly how identities were used and whether the Dubin framework applies to your specific facts. This analysis is not something most firms are equiped to do because most firms have not absorbed what Dubin means for their practice yet.

You do not have to choose between fighting everything and pleading to everything. Dubin opened a third option: challenge the 1028A counts specifically while addressing the underlying fraud seperately. This was not possible before June 2023.

Consider what this means strategically. Before Dubin, you were basically negotiating with a gun to your head. Accept a plea to the fraud charges or face fraud PLUS mandatory identity theft time. Now you can potentially separate those issues. Admit to the fraud if the evidence is overwhelming but challenge wheather the identity component meets the Dubin crux standard. This is a fundamentally different negotiating position than defendants had two years ago.

What Prosecutors Will Argue Against You

Now heres were it gets complicated. The government has read Dubin too.

Prosecutors will distinguish your case from Dubin in every way they can. They will argue that Dubin involved a healthcare billing dispute were the patients identity was used for ordinary billing purposes. PPP fraud is different, they will say. The fake employees or stolen SSNs were the MECHANISM of fraud. Without fabricated identities, there was no inflated payroll to justify the loan amount.

They will argue that you specifically chose to use someone elses information to carry out your scheme. That was not accidental. That was not incidental. That was deliberate and central to how the fraud worked.

Lower courts have already started limiting Dubin in circuts were PPP prosecutions are heaviest. The Fifth Circuit and others have held that Dubin does not apply when the defendant specifically chose to use anothers identity to carry out fraud rather than accidentaly including it.

WARNING: Banks and DOJ both benifit from quick guilty pleas.

Banks that processed fraudulant PPP applications want cases closed quickly. Every trial risks exposing their own due dilligence failures. The DOJ wants to clear their massive PPP fraud docket before the ten year statute of limitations starts expiring cases. The only one who loses in a quick plea is you.

This is exactly why the defense matters and why it requires a lawyer who knows the case cold. The question becomes not whether you used someones information but whether that use was at the crux of your criminal conduct. Making this argument persuasivley requires understanding both Dubin and the specific facts of your case.

The government will also point out that Dubin involved a relativley minor overbilling case. Three hundred thirty eight dollars. Your PPP fraud case probly involves significantley more money. Prosecutors will argue that the scale of the fraud changes the analysis. They will say that when the fraud is substantial, every element of the scheme including the identity component was essential to making it work.

None of these arguments are automatically fatal to a Dubin defense. But they show why this is not a simple legal argument. It is a complex strategic battle that requires preparation, knowledge of the evolving case law, and an understanding of how federal judges in your district are interpreting the ruling.

Your Next Seventy Two Hours Matter More Than the Next Seventy Two Months

Stop reading other articles. Heres what you need to do right now.

First, understand that federal PPP fraud cases are not slowing down in 2025. The government has years left on the statute of limitations. They are still investigating. They are still charging. Sentences are 40% longer now than they were in 2021-2022 for identical conduct. The window of leniancy closed years ago.

Second, get your documents together. Every PPP application you submitted. Every communication with your bank. Every payroll record. Every email discusssing the loan. Your attorney needs to see exactly what you said, when you said it, and who you said it to.

Third, stop talking. To anyone. To your buisness partners. To your employees. To your family members who might have been involved. Every conversation you have can become evidence. Every text message can be subpoenad. Attorney client privelege only protects conversations with your actual lawyer.

This point deserves extra emphasis becuase its were most people mess up their cases. You want to explain yourself. You want to tell your side of the story. You think if the investigators just understood what realy happened, they would see it was not that bad. This impulse will destroy you. Federal agents are trained to use your desire to explain against you. Every word you say without a lawyer present is a potential exhibit at trial.

Fourth, call Todd Spodek at Spodek Law Group. Call 212-300-5196. Not tomorow. Not after you finish reading more articles. Now. Every day you wait, the government gets stronger. Every day you wait, your options narrow. Every day you wait, potential defenses become harder to preserve.

The Dubin defense may apply to your case. It may not. But you will not know until someone who understands post-2023 federal law analyzes your specific facts. Most attorneys are still arguing pre-Dubin strategies because they have not caught up to what the Supreme Court changed.

Heres the reality: the next seventy two hours of your life matter more than the next seventy two months. What you do right now determines whether you spend years in federal prison or whether you have a fighting chance. The phone number is right there. The consultation is confidential. The analysis is specific to your case.

Your PPP fraud charges are serious. The aggravated identity theft addition makes them exponentialy more dangerous. But serious does not mean hopeless. Dangerous does not mean unwinnable. It means you need a defense team that understands exactly what they are fighting and exactly how to fight it.

At Spodek Law Group, thats what we do. We fight federal charges. We know Dubin. We know PPP prosecutions. We know aggravated identity theft inside and out. And we know that the person reading this at two in the morning deserves a lawyer who will fight as hard as they would for their own family.

The call is free. The analysis is real. The defense starts now.

We understand what you are going through. The fear that wakes you up at night. The constant calculations about how long you might be away from your family. The desperate search for some piece of information that changes everthing. We have helped hundreds of clients facing these exact charges. We know the law. We know the courts. We know how to fight.

212-300-5196. Thats the number. Thats were the defense begins.