Bridgeport PPP Loan Fraud Lawyers

Bridgeport PPP Loan Fraud Lawyers

FBI New Haven 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 Bridgeport, Connecticut’s largest city, prosecuted in District of Connecticut 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 Connecticut including Bridgeport prosecutions.

Forgiveness Creates Federal Charges

Your Bridgeport 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 but 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 service tasks, excluding them meant falling short of the forgiveness threshold, owner compensation calculations followed methods your accountant recommended but those methods exceeded what PPP regulations permitted, expense documentation included costs paid slightly outside the covered period that seemed close enough to qualify, SBA approved your application, the debt vanished, you believed federal involvement ended with that approval, this assumption creates criminal liability throughout District of Connecticut because if your forgiveness application contained false statements when submitted – 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 Connecticut prosecutors charge forgiveness fraud with identical statutes, penalties, and Guidelines calculations as original application fraud.

Bridgeport business owners assumed SBA’s forgiveness approval meant the matter was closed permanently.

Federal prosecutors in District of Connecticut conduct separate criminal investigations years after administrative approval, examining whether applications contained false information when originally submitted.

When Calculations Become Crimes

Your Bridgeport business operated with W-2 employees and 1099 contractors. Core operations required full-time staff. Specialized functions utilized independent contractors. The forgiveness application required payroll expense totals for the covered period. You calculated based on what seemed reasonable during pandemic disruption – contractors performing essential functions got included because they functioned like employees during emergency operations. Owner compensation followed your accountant’s calculation methods, but those methods inflated eligible amounts beyond PPP regulatory caps.

Bridgeport business owners throughout Connecticut confront this question: when do calculation decisions made with professional accountants cross into criminal territory? Federal prosecutors must demonstrate intent – proof you knew the forgiveness application contained false information when you submitted it through your lender’s portal. Wire fraud carries 20-year statutory maximum. False statements to SBA carry 30-year maximum. These statutory limits don’t determine actual sentences – Guidelines based on fraud loss amount control prison time. The constitutional requirement proving criminal intent remains, but once prosecutors file charges, that burden becomes difficult meeting.

District of Connecticut prosecutors examine forgiveness application accuracy at submission time, not whether errors resulted from accounting confusion or deliberate fraud. You included contractors because they performed critical business functions during covered period. You calculated owner compensation using methods your accountant employed, but calculations exceeded regulatory limits. You rounded employee counts or included part-time workers in full-time equivalents based on hours worked. Each calculation decision creates criminal exposure if prosecutors can demonstrate you understood PPP eligibility rules and deliberately violated them to maximize forgiveness amounts.

FBI New Haven agent contacts your Bridgeport business.

“We need to verify information about your PPP forgiveness application.” Sounds administrative. It’s criminal investigation designed to obtain admissions proving intent. Bridgeport business owners respond without defense counsel, unaware investigators already possess complete financial records through grand jury subpoenas issued months earlier. They pulled tax returns via IRS administrative summons. They obtained your forgiveness application from SBA’s database, examined quarterly 941 payroll tax filings with IRS.

They know the discrepancies.

Investigators compare forgiveness application payroll calculations against quarterly tax filings you submitted to IRS. They examine contractor payments documented on 1099 forms that you included in employee payroll totals on forgiveness application. They review bank records to verify expenses you claimed during covered period were actually paid. Any inconsistency between your application and independently verified records becomes evidence supporting false statement charges. The interview seeks admissions – statements where you acknowledge understanding forgiveness rules, knowing your calculations were incorrect, submitting the application anyway because you needed the debt forgiven.

You received $150,000 PPP and obtained full forgiveness. The 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 Connecticut operates through mandatory Guidelines based on fraud loss. Loss equals the forgiven amount obtained through fraudulent statements. Small PPP fraud ($20,000-$150,000) typically results in probation to 18 months for first-time offenders. Your $150,000 falls at this bracket’s ceiling. Medium PPP fraud ($150,000-$550,000) produces 18-36 month sentences. Three factors control placement within Guidelines brackets: fraud loss weighs heaviest, criminal history second, acceptance of responsibility third. Department of Justice data from December 2024 shows 81% of pandemic fraud defendants received prison time according to official statistics.

Call 212-300-5196.