CARES Act PPP Fraud Charges in New York: What the Southern and Eastern Districts Are Actually Doing in 2025
Welcome to Spodek Law Group. Our goal is to give you the reality of PPP fraud prosecutions in New York - not the sanitized version other attorneys present, not the "COVID is over so you're safe" fiction, but the actual truth about what federal prosecutors in Manhattan and Brooklyn are doing right now to people who thought they were in the clear.
The Paycheck Protection Program ended years ago. COVID-19 emergency declarations expired. Your loan got forgiven. You probably assumed this chapter of your life was closed. That assumption might destroy you.
Federal prosecutors in the Southern District of New York and Eastern District of New York have not moved on. They've spent four years building cases. The 10-year statute of limitations Congress passed in 2022 means they can charge 2020 fraud until 2030 - and 2021 fraud until 2031. That forgiveness letter you celebrated? The one where you certified under penalty of perjury that your original application was accurate? That's Exhibit A in your prosecution file.
The Clock You Didnt Know Was Running
Heres the thing most people get catastrophically wrong about PPP fraud exposure. They think time passing equals safety. Four years, five years - surely if the government was going to charge you, theyd have done it by now.
That logic works for shoplifting. It dosent work for federal financial fraud.
When Congress passed the COVID-19 EIDL Fraud Statute of Limitations Act and the PPP and Bank Fraud Enforcement Harmonization Act in 2022, they extended the prosecution window to ten years. Not five. Ten. That means fraud committed in April 2020 remains prosecutable until April 2030. Fraud from January 2021 stays open until January 2031.
But heres the kicker - the statute doesn't start running from when you committed the fraud. For many charges, it starts from when the government discovered it. So if SBA data analytics flagged your application in 2024, the clock might have just started. Every year you thought was bringing you closer to safety was actualy bringing prosecutors closer to you.
The Department of Justice COVID-19 Fraud Enforcement Task Force released its 2024 report showing they've charged over 3,096 defendants. As of December 2024, they secured 2,532 convictions. Thats an 81.8 percent conviction rate. And theyre not slowing down. In February 2025, DOJ confirmed over 700 active investigations still underway. In June 2025, they announced 200 more individuals charged and $78 million seized.
This isnt the wind-down phase. This is the acceleration phase.
The Government Accountability Office released a report in May 2025 confirming over 2,500 convictions with a 96 percent conviction rate in pandemic fraud prosecutions. Think about that number. Ninety-six percent. If your charged with PPP fraud in federal court, the statistical likelihood of conviction is overwhelming. Defense attorneys dont beat these cases at trial - they negotiate outcomes before charges are filed or work to minimize sentences after conviction.
And the geographic concentration matters enormously for New York defendants. SDNY and EDNY handle some of the highest-profile and highest-dollar PPP fraud cases in the country. The judges in these districts have sentenced dozens of pandemic fraud defendants. They know the patterns. They've heard every excuse. The learning curve that once benefited early defendants has been replaced by institutional memory that works against you.
Why Your Forgiveness Approval Means Nothing
Let that sink in for a moment. You recieved that forgiveness letter. You thought it meant the government reviewed your application, found it acceptable, and closed the matter. That is completly wrong.
PPP loan forgiveness was handled by lenders, not by the SBA's enforcement division. The lender checked boxes. They verified you submitted paperwork. They did not conduct forensic audits of your payroll records. They did not cross-reference your claimed employee count against your quarterly tax filings. They processed volume.
When you applied for forgiveness, you signed a certification. That certification said - under penalty of perjury - that the information in your original PPP application was true. If your original application overstated employees, inflated payroll, or misrepresented your business operations, you just created a second federal crime. Your forgiveness application is now evidence of ongoing fraud, not evidence of government approval.
OK so what does this mean practicaly? It means the government has two opportunities to charge you. The original application fraud. And the forgiveness application fraud. Different dates, different certifications, potentially different statutes of limitations.
Your forgiveness letter is not a get-out-of-jail-free card. It is a signed confession that you are still asserting false statements are true.
At Spodek Law Group, we've seen clients come in believing forgiveness protected them. It dosent. What forgiveness did was create a documented paper trail showing you doubled down on whatever representations you made originally.
What SDNY and EDNY Are Actualy Doing Right Now
The Southern District of New York - the federal court covering Manhattan - has an 88 percent indictment rate for PPP fraud cases. SDNY prosecutors prefer grand jury indictments even for cooperative defendants becuase SDNY juries are prosecution-friendly. This isnt hyperbole. This is documented reality.
In one of the most significant SDNY cases, a defendant recieved 25 years in federal prison for a $10 million COVID-19 loan fraud scheme. Twenty-five years. Not months. Years. The defendant used stolen identities, fabricated tax records, and shell companies to submit 14 fraudulent PPP and EIDL applications.
The Eastern District of New York - covering Brooklyn, Queens, Long Island - is equally aggressive. In August 2024, EDNY charged two NYPD detectives. Read that again. New York City police detectives. John Bolden and Anthony Carreira, along with two co-defendants, allegedly submitted fraudulent PPP applications for themselves and more then 65 other individuals. The scheme ran from May 2020 through October 2022.
Think about that. Law enforcement officers who should have known better thought they could get away with it. They couldnt. What makes you think your application wont be found?
In May 2024, EDNY indicted a Long Island woman named Donna Ingram for a $3.28 million scheme. She submitted 27 fraudulent applications for her own companies and 22 applications for other businesses. False revenue, false employee counts, false payroll figures. The U.S. Secret Service - not the FBI, the Secret Service - announced the indictment. Thats how many agencies are working these cases.
Heres were it gets worse. November 2025 - just weeks ago - the Brooklyn District Attorney announced six family members indicted together for PPP fraud conspiracy. Karima Branche, Faye Wilkie-Fields, Wilworth Branche, Carol Horton, Monique Horton, and Paul Neufville. Family spanning Brooklyn, Georgia, and Florida. All charged together.
This isnt ancient history. This is happening right now.
Notice the pattern in these cases. They dont just charge the person who benefited from the fraud. They charge the preparers, the facilitators, the family members who helped. The conspiracy charges allow prosecutors to sweep up everyone connected to the scheme. If you used a consultant to prepare your application, and that consultant prepared fraudulent applications for other clients, your case is now part of a larger conspiracy investigation. Your exposure expands based on other peoples conduct.
The IRS Criminal Investigation division reports a 98.5 percent conviction rate in prosecuted COVID fraud cases over the last four years. The SBA Office of Inspector General has estimated that over $200 billion in CARES Act loans were potentialy fraudulent. The government has recovered over $882 million through criminal restitution orders, more then $500 million through civil settlements, and over $1 billion in forfeited assets. These arent small numbers. This is coordinated, well-funded, agressive enforcement.
The 81% Reality: Why Probation Is Gone
If your reading this hoping a good lawyer can get you probation if charged, you need to understand what has changed. The era of pandemic-era leniency is over. Completly over.
Of the 2,143 defendants sentenced as of December 31, 2024, exactly 1,741 recieved prison time. Thats 81 percent. More then four out of five people convicted of PPP fraud go to federal prison.
But thats not the worst part. Heres the part nobody talks about.
Defendants sentenced in 2024-2025 are recieving prison terms 40 percent longer on average than defendants sentenced in 2021-2022 for identical conduct. Same fraud amount. Same circumstances. 40 percent more prison time.
Why? Because judges have seen enough. The early cases got some benefit of the doubt. Economic desperation during COVID. Unclear guidance on allowable uses. Sympathetic circumstances. Those arguments are exhausted now. Judges have sentenced hundreds of these cases. There patience for excuse-making is gone.
A Cincinnati defendant sentenced in March 2025 recieved 18 months in federal prison. The fraud amount? Twenty-one thousand dollars. Not millions. Not hundreds of thousands. $21,000. Think your "small" fraud dosent matter? It matters enough for a year and a half in federal prison.
There is no amount too small to prosecute. There is no circumstance sympathetic enough to guarantee probation. The 81 percent prison rate is your reality.
How Cooperating Witnesses Destroy Defenses
Heres what nobody tells you about PPP fraud investigations. The government dosent need your confession. They dont even need your documents. They need one person who knows what you did and wants to reduce their own sentence.
Think about everyone involved in your PPP application. Your accountant who prepared the financials. Your bookkeeper who knew the real payroll numbers. Your business partner who saw what happened to the money. The loan preparer or consultant who helped submit the application. Any employee who was on payroll but never actualy worked.
Every single one of those people is a potential cooperating witness.
In the EDNY detective case, the investigation revealed that defendant John Bolden helped submit fraudulent applications for more then 65 individuals. When cases like that break open, prosecutors have a buffet of potential cooperators. Each person facing charges has one way to reduce their sentence: provide evidence against someone else.
As Todd Spodek explains to clients facing federal investigation, the math is brutal. If your loan preparer submitted 50 fraudulent applications and gets charged, they face decades of exposure. They can reduce that exposure by cooperating. Which means providing the government with complete files, communications, and testimony about every single client - including you.
This is why waiting to see what happens is so dangerous. While your waiting, investigations are proceeding. Witnesses are being identified. Cooperation agreements are being negotiated. And every cooperating witness makes the case against remaining defendants stronger.
The family conspiracy indictment from November 2025 shows another pattern. When one family member gets investigated, others get pulled in. The relative who "helped" you with your application - maybe preparing documents, maybe receiving some of the loan proceeds - is now either a co-defendant or a cooperating witness. Those are the only two options.
The Moment Investigation Becomes Indictment
The DOJ COVID-19 Fraud Enforcement Task Force coordinates multiple agencies. IRS Criminal Investigation. FBI. SBA Office of Inspector General. U.S. Secret Service. USPS. These agencies share data. They cross-reference information. They build cases methodicaly.
Heres the reality of how it typically unfolds for someone in your situation.
Stage one is silent. SBA data analytics flags something in your application. Maybe the employee count dosent match IRS quarterly filings. Maybe the payroll expenses claimed exceed what tax records show. Maybe the business formation date suggests you created an entity specificaly for PPP. A flag gets raised. You dont know about it.
Stage two involves investigation. Subpoenas go to your bank. Transaction records are pulled. Money movement is traced. If you bought a car, took a vacation, made unusual purchases - all documented. If other people recieved money from your PPP funds, their information is now part of the investigation. Still silent.
Stage three brings interviews. Maybe the bank's compliance officer is interviewed. Maybe your accountant. Maybe former employees. People who have no loyalty to you and no reason to risk federal charges by lying. Information flows to prosecutors. You might hear rumors. You might not.
Stage four is the decision point. Prosecutors review everything. They calculate sentence exposure using federal guidelines. They determine whether you'll be offered a cooperation opportunity or simply charged. Grand jury convenes. Indictment returned. Still sealed.
Stage five is execution. Early morning. Probably at your home. Federal agents with arrest warrant. Handcuffs. Processing. Initial appearance. Bail hearing. Your name in DOJ press release.
The time between stage one and stage five can be years. Thats not incompetence. Thats strategy. Prosecutors build the strongest possible case before revealing it exists.
What Happens If SDNY or EDNY Charges You
If your charged in the Southern District of New York or Eastern District of New York with PPP fraud, you face serious federal charges. The most common include:
Bank fraud under 18 U.S.C. 1344 carries a maximum of 30 years per count. Wire fraud under 18 U.S.C. 1343 carries 20 years per count - or 30 years if the fraud affected a financial institution. Money laundering under 18 U.S.C. 1956 carries 20 years per count. Making false statements to obtain federal funds under 18 U.S.C. 1014 carries 30 years.
These maximums stack. Prosecutors routinely charge multiple counts. A defendant facing three counts of bank fraud and two counts of wire fraud has theoretical maximum exposure of 130 years. Sentencing guidelines produce lower numbers, but the exposure creates enormous pressure to plead guilty.
Restitution is mandatory. Of 2,143 defendants sentenced by December 2024, 2,008 - ninety-four percent - were ordered to pay restitution. Amounts ranged from thousands to over $71 million. Unlike regular debt, federal restitution follows you forever. It cant be discharged in bankruptcy. The government can garnish wages, seize tax refunds, and collect until you die.
Asset forfeiture proceedings often run paralel to criminal cases. The $78 million seized in June 2025 came from forfeiture actions. Property purchased with fraud proceeds - vehicles, real estate, luxury items - gets seized. Your using fraud money to buy assets creates evidence trail AND gives government something to take.
The sentence range depends heavily on multiple factors. First-time offenders with smaller fraud amounts face guideline ranges that might start around 18-27 months. But enhancements pile up fast. Sophisticated means enhancement. Abuse of trust enhancement. Amount involved enhancement. Obstruction enhancement if you destroyed documents or lied to agents. A $100,000 fraud that seems "small" can easily produce guideline calculations calling for 3-4 years in federal prison.
A Georgetown couple was sentenced to a combined 32 years in federal prison for using dormant business names to submit six fraudulent PPP applications totaling over $3.5 million. A Nevada man recieved over 15 years in August 2025 for obtaining more then $11 million in PPP loans and laundering the funds through real estate, gambling, and luxury items. These arent outliers. These are the kinds of sentences judges are imposing now that pandemic sympathy has evaporated.
What You Can Actualy Do Right Now
The single most important thing to understand is this: pre-indictment intervention is infinitely better then post-indictment defense. Once your charged, your options narrow dramaticaly. Before your charged, possibilities exist.
At Spodek Law Group, Todd Spodek has guided clients through federal investigations involving SDNY and EDNY. The approach depends entirely on your situation, but options may include:
If you havent been contacted by investigators, proactive assessment matters. Understanding your actual exposure. Evaluating what evidence exists. Determining whether voluntary disclosure or quiet monitoring makes more strategic sense.
If youve recieved a target letter, the window for pre-charge negotiation is open but closing. Target letters mean grand jury investigation is underway. They also mean prosecutors are required to give you opportunity to present your side before indictment. This is where experienced federal defense counsel can sometimes influence charging decisions.
If youve been approached by agents, what you say in that moment can define your case. Most people talk when they shouldnt. They make partial admissions thinking cooperation helps. It often dosent. What helps is having counsel present before any substantive conversation occurs.
Heres the thing - waiting to see what happens is itself a choice. Its a choice to let the government build their case unopposed. Its a choice to remain ignorant of your exposure while prosecutors calculate it precisely. Its a choice to be reactive when proactive intervention might have changed outcomes.
The Prometheus Reality
The business owners who will face the worst outcomes are the ones who right now believe their convinced their PPP situation is in the past. They got forgiveness. COVID ended. Years passed. They moved on mentaly.
Meanwhile, federal prosecutors in Manhattan and Brooklyn have not moved on. They have 10-year statutes of limitations. They have 700+ active investigations. They have task forces coordinating data across IRS, FBI, SBA, Secret Service. They have cooperating witnesses from related cases. They have complete banking records and tax filings.
And they have time. All the time they need.
The question isnt whether your safe because time passed. The question is whether your case is in the 700+ currently being investigated. The question is whether your loan preparer, accountant, or business associate is currently cooperating. The question is whether SBA data analytics has already flagged your application.
You dont know the answers to those questions. But you can find out. You can understand your actual exposure rather then hoping it dosent exist. You can have federal defense counsel evaluate your situation before agents knock on your door.
The 81% prison rate applies to people who waited until they were charged. The outcomes for people who acted proactively look very different.
The next move is yours. That window for pre-indictment intervention exists, but it closes without warning. Call Spodek Law Group at 212-300-5196. Have the conversation. Understand your options. Because the clock thats running isnt the one you thought - and every month you wait is a month prosecutors use to build their case.
They had four years. You have whatever time remains before indictment. Use it.
