Chicago PPP Loan Fraud Lawyers
You got a PPP loan during the pandemic. Maybe through your accountant, maybe through some broker your coworker recommended. The application went through, the money hit your account, you used it. That was 2020. Maybe 2021. Years ago.
It hasnt gone away.
The federal government turned PPP prosecution into an assembly line - and Chicago is directly in the crosshairs. The Northern District of Illinois covers Cook County and the metro area, and theyre actively indicting through 2025. Congress extended the statute of limitations to 10 years. That 2020 loan you thought was forgotten? Its prosecutable until 2030. But heres what makes Chicago different from anywhere else: 375 Illinois state workers are already under investigation. Half admitted paying kickbacks to underground brokers. If you used a broker - any broker - that persons now a potential witness against you.
Welcome to Spodek Law Group. We handle federal PPP loan fraud defense in Chicago and throughout the Northern District of Illinois. If youve received a letter from the SBA Office of Inspector General, if federal agents have contacted you, if youre a state or city employee worried about the investigations making headlines - this article explains what youre actually facing.
The Assembly Line Is Running
In August 2022, President Biden signed legislation that most people completly missed.
It extended the statute of limitations for PPP fraud from 5 years to 10 years - retroactively.
That means a PPP loan from 2020 is prosecutable until 2030. A loan from 2021 until 2031. Congress gave the government a full decade to come for you. And there using it. The COVID-19 Fraud Enforcement Task Force coordinates across FBI, IRS Criminal Investigation, SBA OIG, and the Secret Service. They have strike forces dedicated to this.
Every PPP loan ever issued is now subject to prosecution for a full decade from the date of the offense.
According to Pandemic Oversight, as of December 2024: 3,096 defendants charged nationally, 2,532 convicted, 1,741 received prison time. Thats an 82% conviction rate and 81% of those convicted going to prison. This isnt a few headline cases. This is an assembly line.
The Northern District of Illinois has been particuarly aggressive. Recent indictments in Chicago: five individuals charged in July 2025 for PPP and EIDL fraud. Four more in August. Three members of the Echols family indicted for $2 million in fraudulent applications - they bought mink coats from Andriana Furs with the proceeds. The Dirksen Federal Building at 219 South Dearborn is processing these cases steadily.
What used to take 8-12 months from investigation to indictment now takes 4-6 months. The government has gotten faster.
375 State Workers Already Under Investigation
Heres what nobody outside Illinois is talking about.
The state of Illinois has been running its own parallel investigation into government employees who took PPP loans. According to the Chicago Tribune, 375 state workers have been implicated. Seven point two million dollars in improper loans. More than 200 have lost there jobs or resigned. Some have been refered for criminal prosecution.
Half of those 375 admitted something that should terrify anyone who used a broker: they paid kickbacks.
Underground brokers - some legitimate-seeming, some clearly shady - submitted falsified PPP applications on behalf of state employees. In exchange for cuts ranging from $500 to $10,000. The employees thought they were getting help navigating a confusing process. What they actually did was create a co-conspirator who has every incentive to cooperate against them.
If you used a broker - any broker - that brokers now a potential cooperating witness against you.
The broker faces there own charges. The broker knows exactly what you told them about your "business." The broker kept records. And the broker, looking at federal prison time, has enormous motivation to provide testimony against the people who paid them. You signed the application. Your name is on it. The broker has the story of how it happened.
Your coworkers recommendation might become your biggest problem.
The Chicago Office of Inspector General initially identified nearly 1,000 problematic PPP loans involving city employees alone. The Cook County Circuit Court Clerk investigated 78 cases. This isnt a federal problem only - its state, county, and city investigators all feeding information to the same place.
State employees thought government jobs protected them. Instead, the opposite happened. W-2s on file. Home addresses known. Employment records accessable. Inspector General offices with subpoena power. Your state job didnt protect you. It made you easier to find.
The Charge Stack: One Application, Five Felonies
The PPP itself doesnt have criminal provisions. The CARES Act isnt a penal statute. So how are people going to federal prison?
The DOJ uses pre-existing fraud statutes. One application can trigger multiple charges:
- Wire Fraud (18 U.S.C. § 1343) - 20-30 years
- Bank Fraud (18 U.S.C. § 1344) - 30 years
- False Statements to SBA (18 U.S.C. § 1014) - 30 years
- Money Laundering (18 U.S.C. § 1956) - 20 years
- Aggravated Identity Theft (18 U.S.C. § 1028A) - mandatory +2 years consecutive
One PPP application can create theoretical exposure exceeding 100 years. In practice, sentences dont reach that level. But charge stacking gives prosecutors enormous leverage in plea negotiations. When your facing five counts instead of one, the mathematics of cooperation change dramaticaly.
Recent Chicago-area sentences:
- Feroz Jalal (Niles, IL): 62 months federal prison for $1.5 million PPP fraud. Full restitution ordered.
- Farooq Khan (Chicago): 42 months for facilitating 30 fraudulent applications through his tax prep business. $3.6 million scheme.
- Rahul Shah (Evanston): Convicted on multiple counts of bank fraud and PPP fraud involving $55 million+. Faces up to 30 years per count.
- Samuel Jackson (Chicago): 18 months for $1.9 million in PPP and EIDL fraud.
"Do people actualy go to prison for a $20,000 PPP loan?"
Yes.
A Cincinnati defendant got 18 months in federal prison for $21,000 in PPP fraud. The amount doesnt protect you. Federal judges in 2025 include prison time in nearly every PPP sentencing regardless of how much you took. This isnt about proportionality anymore. Its about deterrence. They want headlines.
Defendants sentenced in 2024-2025 are recieving sentences approximately 40% longer than defendants who committed identical conduct but were sentenced in 2021-2022. Early pandemic leniency is completley over. If your under investigation now, you face a very differant landscape then someone caught three years ago.
The Window That Closes
Theres a window - typically six to twelve months - between when the SBA OIG flags a loan and when the case gets refered to the FBI for criminal investigation. During this window, there is leverage that completley disappears once criminal charges are filed.
Most people dont know this window exists.
During the OIG review stage, a skilled defense attorney may be able to negotiate a civil disposition. Repayment plus a fine. Maybe a False Claims Act settlement. Not pleasant - but not a federal felony conviction either. Not prison. Not a permanent record that destroys your career.
But heres the trap most people fall into.
Some people, panicking, decide to voluntarily repay the loan thinking it will make the problem go away. The DOJ has explicitly stated that voluntary repayment can be used as evidence of consciousness of guilt. Returning the money doesnt make it go away. It can actualy strengthen the governments case against you. It suggests you knew something was wrong.
This is complicated. The timing matters enormously. Whether to repay, when to repay, how to structure any resolution - these decisions require counsel who understands how federal prosecutors think.
Now - to be clear - some people do get probation. Lola Gilmore, a state employee, got probation and community service for $49,000 in fraud. State-level resolutions exist. Not every case becomes federal.
The differance between probation and prison often comes down to timing. Specifically, whether you acted during the OIG window or waited for FBI handcuffs. The people getting probation acted early, cooperated with counsel, made restitution before criminal charges. They didnt wait. They didnt try to handle it alone.
If youve recieved any contact from investigators - even just questions - dont talk to them without an attorney present.
There have been cases where people who talked to investigators without counsel ended up charged with obstruction or false statements in addition to the underlying PPP fraud. The agents seem friendly. Cooperative. Their not on your side.
When Your Ready
If youre in Chicago - or anywhere in the Northern District of Illinois - and youre facing a PPP investigation, Spodek Law Group can help you understand where you stand and what options exist.
Todd Spodek has handled federal fraud cases including PPP matters in federal courts. He understands the differance between OIG-stage investigations where civil resolution may be possible, and FBI-stage investigations where criminal defense is the priority.
The consultation is free. Theirs no obligation.
What youll get is an honest assessment. Is this still at the OIG stage? Has it been refered to the FBI? What does the evidence look like? What are realistic outcomes - not best-case fantasies, but actual possibilities based on how these cases play out in the Northern District?
Call us at 212-300-5196.
The statute of limitations runs until 2030 or 2031 depending on when you got the loan. The government has time. You may not. The earlier you have counsel, the more leverage exists.
Dont wait until federal agents show up at your door.
Were here.
