Can I Still Be Prosecuted for a 2020 PPP Loan in 2025?

The answer is yes. And the reason why should terrify you.

You've probably been counting down the days, watching that five-year mark approach like it's some kind of finish line. April 2020 to April 2025 - five years for wire fraud, right? That's what you've heard. That's what you've been hoping. Welcome to Spodek Law Group. Our goal is to give you the real information about PPP prosecution - not the sanitized version, not the version that lets you sleep at night. The version that might actually save you.

You've been counting wrong. The statute of limitations for PPP fraud isn't five years. It's ten. Congress made sure of that in August 2022 when they passed legislation specifically designed to keep 2020 PPP borrowers in the crosshairs until 2030. That clock you thought was running out? It hasn't even reached the halfway point.

The Clock You're Counting On Doesn't Exist

Most people who took PPP loans in 2020 and did something questionable with them - inflated payroll numbers, used funds for personal expenses, made up employees, exagerated the number of workers on payroll - they've been watching the calendar. Counting the days. Telling themselves that if the government was going to do something, they would have done it by now. Five years feels like forever when your waiting for the other shoe to drop.

Thats not how federal investigations work.

The five-year statute of limitations you've been counting on applies to wire fraud under 18 U.S.C. 1343. But prosecutors almost never charge PPP fraud as just wire fraud. They charge it as bank fraud under 18 U.S.C. 1344. Bank fraud carries a ten-year statute of limitations. And heres the thing - PPP loans went through banks. Every single one of them. Even the ones issued by fintechs ultimatly cleared through a federally insured institution. Thats why they were guarenteed by the federal government. Thats why they were called loans, not grants.

So that April 2025 deadline youve been watching? Its a mirage. The real deadline is April 2030. You're not approaching safety. Your barely past the starting line. Every morning you wake up and check the news, looking for signs that PPP enforcement is winding down - you're wasting your time. The enforcement is ramping UP.

Congress Extended the Deadline Specifically to Catch You

This wasnt an accident. This wasnt some bureaucratic oversight or technicality that happened to benefit prosecutors.

In August 2022, Congress passed two bills - the PPP and Bank Fraud Enforcement Harmonization Act of 2022 and the COVID-19 EIDL Fraud Statute of Limitations Act of 2022. Both bills did exactly one thing: they extended the statute of limitations for pandemic relief fraud from five years to ten years. President Biden signed them into law. The vote was bipartisan. Nobody opposed it.

Think about what that means. In 2022, two years after PPP loans were distributed, Congress looked at the situation and said: these people think theyre going to get away with it. We need more time to catch them. We need to make sure that every single person who defrauded this program faces consequences.

And yes - these laws apply retroactively. If you took a PPP loan in 2020, the new ten-year clock applies to you. The government gave itself until 2030 to find you, investigate you, and charge you. They didnt ask for your permission. They didnt grandfather in existing cases. They changed the rules specificaly to keep you in the game.

Heres the kicker. The DOJ didnt just get more time. They got more resources, more personnel, more technology. The COVID-19 Fraud Enforcement Task Force, created in 2021, has charged over 3,500 defendants with federal crimes related to pandemic fraud. As of December 2024, over 2,532 of those defendants have already been convicted. The machine is running. Its getting more efficiant, not less. Its finding patterns that human investigators would of missed.

How They're Finding Cases Now - And Why You Might Already Be Flagged

The federal investigation machine dosent announce itself. It runs quietly in the background, collecting everthing it needs, and only reveals itself when the case is basicly complete. By the time you find out your under investigation, they already have what they need to convict you.

OK so heres how they find cases now. Multiple agencies are working together - FBI, IRS Criminal Investigation, SBA Office of Inspector General, the Secret Service, and specialized units you probly havent heard of. They share information across agencies. They cross-reference databases that never talked to eachother before the pandemic. And they have tools you probly havent thought about.

The SBA and IRS now automaticly cross-reference PPP loan applications with tax returns. If you claimed $400,000 in annual payroll on your PPP application but reported $150,000 to the IRS, that discrepency is flagged. Not by a human reviewing paperwork. By an algorithm that never sleeps and never forgets. Your already in a database somewhere. The question is wheather that flag has moved from "suspicious" to "investigate" to "prosecute."

Whistleblowers are another huge source of cases. The False Claims Act lets private citizens report fraud and collect a portion of whatever the government recovers - sometimes 15% to 30% of the total. Those bounties incentivize people to turn in there employers, there business partners, even there family members. Someone who knows what you did might be looking at a six-figure payday for making a single phone call. That disgruntled employee you fired in 2021? They remember everything.

Banks are helping too. Not becuase there good citizens - becuase it protects them from liability. If a bank distributed a fraudulent PPP loan, they could face questions about there due diligance. But if they help identify the fraud and point the finger at the borrower, they're cooperating with law enforcement. They have every incentive to throw you under the bus. Your bank statements are already in there files.

And heres something practitioners know that the public dosent: the government is strategicaly waiting for people to accumulate more assets before charging them. Asset forfeiture is a major part of these cases. If you took that PPP money and built something with it - bought a house, grew your business, invested in real estate - congratulations. You just made yourself a more attractive target. They want you to prosper so theres more to seize when they finally move.

What Happens When They Charge You - The Numbers Are Brutal

Lets talk about what actualy happens when the government decides to prosecute. Todd Spodek has handled federal cases for years, and the pattern is consistant. By the time they charge you, the case is essentialy already built. Federal prosecutors dont guess. They dont hope. They wait untill the evidence is overwhelming and the outcome is almost certain.

IRS Criminal Investigation - the agency that investigates most PPP fraud cases - achieves over a 90% conviction rate. Thats not a typo. Ninety percent. If your charged, theres a nine in ten chance your going to be convicted. The federal system dosent work like state court. There are no technicalities that get you off. There are no sympathetic jurys that nullify. If they bring the case, they win the case.

Out of thousands of PPP fraud sentencings reported through 2024, only TWO defendants recieved probation. Read that again. Two. Out of thousands. Everyone else - regardless of criminal history, regardless of the amount, regardless of personal circumstances, regardless of cooperation - went to federal prison.

The federal system dosent have parole. You serve at least 85% of whatever sentence the judge imposes. A 46-month sentence means your doing roughly 39 months before release. Thats over three years behind bars. Away from your family. Away from your business. Away from everthing you built.

And the sentences arent light. Bank fraud carries a maximum of 30 years per count. Wire fraud carries 20 years. If they add money laundering becuase you spent the funds on personal items - cars, houses, luxury goods, vacations, gambling - thats another 20 years per count. Prosecutors stack charges. They use them as leverage to force plea deals. The person who goes to trial faces three times the sentence of the person who pleads guilty early.

WARNING: If you think you can just plead guilty and get a slap on the wrist, your wrong. The days of pandemic leniency are over. Judges are handing down serious prison time for PPP fraud in 2025.

The 'Small Loan' Defense That Doesn't Work

Your probably thinking: but my loan was small. They go after the big cases. They're not going to waste resources on someone who took $50,000 or $100,000. The government has bigger fish to fry.

That logic is exactly backwards. And believing it might be the mistake that sends you to prison.

In March 2024, a Cincinnati man named Kelton McClarrin was sentenced to 18 months in federal prison for PPP fraud. The amount? $21,000. He used the money for DoorDash, Grubhub, hotels, and jail commissary. Twenty-one thousand dollars. Eighteen months in federal prison. Let that sink in.

Theres no floor. Theres no amount thats "to small" for prosecution. In fact, small cases are often EASIER to prosecute becuase they're straightforward. The fraud is simple. The evidence is clear. The trial is quick. And every conviction counts toward the Task Forces numbers.

Prosecutors measure success by conviction COUNT, not just dollar recovery. A small case that results in a quick guilty plea is actualy valuable to them. It shows the system is working. It justifies there budget. It deters other people from thinking there loan is to small to matter. It sends a message.

The government has prosecuted federal employees who took PPP loans. They prosecuted a former ATF analyst in Michigan. They prosecuted a bank manager in New Jersey who helped others commit fraud. Nobody is to small. Nobody is to insignificant. If the algorithm flagged you, your a target. If a whistleblower reported you, your a target. If your numbers dont match your tax returns, your a target.

Think about how easy it is to prove these cases. The PPP application is a federal document. The tax return is a federal document. When the numbers dont match, thats fraud. There isnt even a complicated investigation needed. Its just math. Two documents. Two different numbers. Case closed.

Prosecutors love these cases becuase there simple to explain to a jury. "Ladies and gentlemen, the defendant told the SBA he had ten employees. His tax return says he had two. Thats not a mistake. Thats fraud." Twenty minutes of testimony. Guilty verdict.

Sentences Are Getting Longer, Not Shorter

Heres something that should scare you even more then everything youve read so far. If your hoping that judges are going to be lenient becuase COVID was a confusing time and everyone was struggling - that window has closed.

Defendants sentenced in 2024 and 2025 are recieving prison terms that average 40% longer then identical conduct sentenced in 2021 and 2022. Early in the pandemic, some judges showed sympathy. People were desperate. The economy was in chaos. There was room for understanding. Judges gave lighter sentences becuase they recognized the extenuating circumstances.

Those days are gone. Completly gone.

Federal judges in 2025 include prison time in nearly every PPP and EIDL fraud sentencing. The sympathy factor has evaporated. The "everyone was struggling" defense dosent work anymore. Judges have seen to many cases. They've heard to many excuses. They've watched defendants lie about there circumstances. The patience has run out.

Look at the recent sentencings:

• Michael and Tiffany Fullerton of Georgetown, Texas - combined 32 years in prison for $3 million in fraud. They used the money to start a marijuana grow operation and buy luxury watches and a boat.
• Meelad Dezfooli of Nevada - over 15 years for $11 million. He bought 25 properties and gambled in Vegas.
• Tamara Starks of Mansfield, Texas - 86 months for $8.5 million.
• Tommy Hawkins, a bank manager in New Jersey - 65 months for helping others get 38 fraudulent loans.

WARNING: Waiting to see if they come for you is not a strategy. Every month that passes makes your potential sentence longer, not shorter. The judges are less sympathetic now then they were a year ago. They'll be even less sympathetic next year.

The clients who come to Spodek Law Group after waiting five years face a diffrent landscape then clients who came to us in 2021. The evidence against them has solidified. The cases against others have set precidents for sentancing. And the judges have lost patience with anyone who claims they didnt understand the rules.

The Narrow Path That Still Exists - But It's Closing

Theres still a path forward. But its narrow. And its closing every single day.

The diffrence between defendants who get crushed and defendants who manage there exposure comes down to timing and representation. Todd Spodek always tells clients the same thing: the worst time to find out your under investigation is when agents knock on your door. The second worst time is right now, reading this article and realizing you might be in trouble.

What can you actualy do?

First, you need to understand your real exposure. An experienced federal defense attorney can review your PPP application, your tax returns, your bank records, and tell you exactly how bad the mismatch is. Sometimes the news is better then you think - the discrepency might be explainable, or the amount might qualify for civil rather then criminal treatment. Sometimes its worse then you thought. Either way, you need to know before making any decisions.

Second, there are options for proactive engagement that dissapear once your charged. In some cases, voluntary disclosure before your indicted can result in civil resolution instead of criminal prosecution. That means paying money - restitution, penalties, interest - instead of going to prison. Its not a guarentee. Nothing is a guarentee. But its an option that ceases to exist the moment the government decides to bring criminal charges.

Third, you need to stop creating new evidence against yourself. If your still using funds from that PPP loan in ways that dont match your application, if your still running the same payroll discrepencies, if your still operating the same way that created the problem in the first place - your making things worse every single day. Your adding to the fraud instead of limiting it.

At Spodek Law Group, we see clients at every stage of this process. Some come to us before anything has happened, just to understand there exposure. Others come after theyve recieved a subpoena or a target letter. A few come after the indictment drops. The earlier you come, the more options exist. The later you come, the harder it gets to help you.

The Waiting Game Is the Losing Game

Every day you wait, the government's case gets stronger. Not weaker. Stronger.

Every month that passes, the sentancing guidelines for your conduct become harsher as judges lose sympathy and set tougher precidents.

Every year you tell yourself "they would of done something by now," investigators are comparing your PPP application to your tax returns, your bank statements, your employee records, your social media posts about that vacation you took in 2021.

Time is not on your side. The investigation dosent announce itself. It builds quietly in the background. It waits for you to make more money so theres more to seize. And when it moves, it moves with overwhelming force. Ninety percent conviction rate. Prison time in nearly every sentancing. Restitution that follows you for the rest of your life.

Ive watched people wait to long. They thought silence meant safety. They thought the lack of a knock on the door meant the storm had passed. They told themselves that the government must of moved on by now. They were wrong. The storm hadnt passed. It was building. It was getting stronger. And when it finaly hit, it hit with the full force of the federal government behind it.

WARNING: The consultation is free. The cost of waiting is not. Call Spodek Law Group at 212-300-5196 before you talk to anyone else. Before you talk to your accountant. Before you talk to your business partner. Before you talk to anyone.

If you took a PPP loan in 2020 and somthing wasnt right about that application - the numbers, the employees, how you spent the funds - you have a decision to make right now. You can keep waiting and hoping, telling yourself that five years of silence means safety. Or you can find out exactly were you stand while you still have options to do something about it.

The clock isnt running out. Its barely started. And the government is just getting warmed up. The question is wheather you want to be ready when they come for you - or wheather you want to be surprised.