FEDERAL CRIMINAL LAWYERS

Baltimore PPP Loan Fraud Lawyers

FBI Baltimore contacted you about PPP forgiveness fraud. The investigation targets documentation you submitted months after receiving funds, when you requested SBA forgive the debt. You’re in Wilmington, Delaware’s largest city, prosecuted in District of Delaware federal court. SBA Office of Inspector General agents appeared questioning payroll calculations that don’t match your quarterly 941 tax filings, independent contractors you listed as employees, owner compensation that exceeded regulatory limits, expenses you claimed but didn’t pay during the covered period. 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, PPP forgiveness cases in District of Delaware including Wilmington prosecutions.

Forgiveness Creates Federal Charges

Your Wilmington business received PPP funds through your bank during 2020. Restaurants throughout the city closed under state orders, retail operations ran at reduced capacity, service businesses lost clients overnight. Emergency relief arrived within weeks. Months passed before SBA opened forgiveness applications. You gathered documentation showing how you spent PPP funds during the covered period – payroll records, rent receipts, utility bills, everything SBA regulations listed as qualifying expenses. The forgiveness application went through your lender’s portal. You maximized forgiveness by including independent contractors in payroll totals, even though PPP rules restricted forgiveness to W-2 employee wages. Your contractors performed essential business functions – IT support, bookkeeping, delivery services, customer relations. Excluding them meant falling short of the forgiveness threshold. Owner compensation calculations followed methods your accountant recommended. Those methods exceeded what PPP regulations permitted, but your accountant used industry-standard approaches for calculating owner draws and salary equivalents. Expense documentation included costs paid slightly outside the covered period that seemed close enough to qualify. You rounded dates by a few days when receipts fell near the boundary. SBA approved your application. The debt vanished. You believed federal involvement ended with that approval. This assumption creates criminal liability for you throughout District of Delaware. If your forgiveness application contained false statements when you submitted it – contractors characterized as employees, salary figures inflated beyond actual W-2 payroll records, expenses claimed but not paid during the covered period – those false statements constitute wire fraud under 18 USC Section 1343 and false statements to SBA under 18 USC Section 1014. The forgiven amount equals your fraud loss for sentencing Guidelines purposes. District of Delaware prosecutors charge forgiveness fraud with identical statutes, penalties, and Guidelines calculations as original application fraud.

You assumed SBA’s forgiveness approval meant the matter was closed permanently for your business.

Federal prosecutors in District of Delaware conduct separate criminal investigations into your application years after administrative approval.

FBI Investigates Your Business

FBI Baltimore agent contacts your Wilmington business. “We need to verify information about your PPP forgiveness application.” The phrasing sounds administrative to you – routine follow-up, documentation review, nothing suggesting criminal investigation targeting you. You respond without defense counsel present. You explain your payroll calculations, how you arrived at owner compensation figures, why you included contractor payments in employee totals. The agent takes notes about your business, seems understanding of your situation, focused on clarifying details about your covered period expenses rather than making accusations against you.

Investigators already possess your complete financial documentation through grand jury subpoenas issued months before contacting you. They obtained your tax returns via IRS administrative summons. They pulled your forgiveness application from SBA’s database. They examined your quarterly 941 payroll tax filings with IRS, or noted the absence of such filings if you claimed employees but never submitted payroll reports. They reviewed 1099 forms you filed for contractors, then compared those contractor names against the employee list on your forgiveness application. They cross-referenced your bank statements against your expense claims to verify your payment dates and amounts.

They know the discrepancies in your application before the interview begins.

The interview seeks admissions from you proving criminal intent. Statements where you acknowledge understanding forgiveness rules but including contractors anyway because they functioned like employees in your business. Acknowledgment that your owner compensation calculations exceeded regulatory caps but seemed reasonable based on your accountant’s advice. Admission that you rounded expense dates to maximize qualifying costs for your business. These admissions transform your application decisions into federal crimes by demonstrating you knew the statements were inaccurate when you submitted them.

You received $150,000 PPP and obtained full forgiveness. Your application claimed payroll expenses $45,000 higher than your quarterly 941 tax filings support because you included contractor payments as employee wages. Federal sentencing in District of Delaware operates through mandatory Guidelines. Loss equals the forgiven amount you obtained through fraudulent statements. Your $150,000 puts you at the ceiling of one sentencing bracket. District of Delaware judges follow Guidelines in nearly every case involving your situation. Department of Justice data from December 2024 shows 81% of pandemic fraud defendants received prison time according to official statistics. Your fraud loss amount drives baseline sentencing calculations for your case. Your criminal history adjusts that baseline. Whether you accept responsibility and cooperate affects the final outcome you face.

Call 212-300-5196.