Connecticut PPP Loan Fraud Lawyers

Connecticut PPP Loan Fraud Lawyers

FBI New Haven contacted you about PPP forgiveness fraud. The investigation targets documentation you submitted months or years after receiving funds, when you requested SBA forgive the debt. You’re prosecuted in District of Connecticut federal court covering Hartford, New Haven, Bridgeport, Stamford, the entire state. FBI New Haven or SBA Office of Inspector General agents appeared questioning payroll calculations that don’t match tax filings, independent contractors listed as employees, expenses claimed but not paid 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.

Forgiveness Fraud Prosecutions in Connecticut

Connecticut businesses received PPP loans through banks during 2020. Restaurants closed under state orders, retail stores operated at reduced capacity, service businesses lost revenue overnight. Emergency relief arrived within weeks. Months passed before SBA opened forgiveness applications. Business owners gathered documentation showing how they spent PPP funds during the eight or twenty-four week covered period – payroll records, rent receipts, utility statements.

Many Connecticut businesses maximized forgiveness by including independent contractors in payroll totals even though PPP rules restricted forgiveness to W-2 employee wages. Owner compensation calculations used methods exceeding regulatory limits. Expense documentation included costs paid outside the covered period. SBA approved the applications. Debts vanished. Business owners believed federal involvement ended.

Connecticut business owners throughout Hartford, New Haven, Stamford regions assumed SBA’s forgiveness approval meant the matter was closed permanently. SBA reviewed submitted documentation, cross-referenced expense claims, approved forgiveness after what appeared to be thorough administrative review. That approval, however, focused on whether documents appeared facially valid, not whether they contained false statements. Federal prosecutors in District of Connecticut conduct separate criminal investigations years after administrative approval, examining whether applications contained false information when originally submitted. The distinction between administrative approval and criminal prosecution proves devastating to business owners who believed SBA’s forgiveness approval ended all federal scrutiny.

Why Federal Prosecutors Charge Forgiveness Identically to Application Fraud

This creates criminal liability throughout District of Connecticut. If your forgiveness application contained false statements when submitted – contractors as employees, inflated salaries, expenses not actually paid – those constitute wire fraud under 18 USC Section 1343. The forgiven amount equals fraud loss for sentencing Guidelines. District of Connecticut prosecutors charge forgiveness fraud with identical statutes, penalties, and Guidelines as application fraud.

When Business Decisions Create Criminal Exposure

Your Connecticut business operated with W-2 employees and independent contractors during 2019. The forgiveness application required payroll totals for the covered period. You calculated based on what seemed reasonable during pandemic disruption. Contractors performing essential functions got included because excluding them meant failing to reach the forgiveness threshold. Owner compensation calculations followed methods used by your accountant, but those methods exceeded what PPP regulations permitted.

Connecticut business owners face this constitutional question: when do calculations become criminal acts? Federal prosecutors must demonstrate intent – proof you knew the application contained false information when submitted. Wire fraud carries 20-year statutory maximum. False statements to SBA under 18 USC Section 1014 carry 30-year maximum. Guidelines based on fraud loss determine actual sentences. The constitutional requirement proving criminal intent remains.

Calculation Errors That Create Federal Charges

District of Connecticut prosecutors examine application accuracy at submission time. You included contractors because they functioned like employees. You calculated owner compensation using your accountant’s method, but it inflated eligible amounts. You rounded employee counts upward because workers came and went. Each calculation creates criminal exposure if prosecutors demonstrate you understood PPP rules and deliberately violated them.

FBI New Haven Investigation Process

FBI New Haven agent contacts your Connecticut business. “We need to verify forgiveness application information.” Sounds administrative. It’s criminal investigation designed to obtain admissions proving intent. Connecticut business owners respond without counsel, unaware investigators already possess complete financial records through grand jury subpoenas. They pulled tax returns via IRS summons. They obtained your forgiveness application from SBA’s database, examined quarterly 941 filings.

They know the discrepancies.

Investigators compare application payroll against quarterly tax filings. They examine bank records verifying expenses claimed were paid. They review tax returns confirming revenue figures. Inconsistencies become evidence. The interview seeks admissions – statements where you acknowledge understanding forgiveness rules, knowing calculations were incorrect, submitting anyway.

FBI agents conducting Connecticut PPP investigations follow standardized procedures designed to establish criminal intent. They ask open-ended questions about your forgiveness application preparation process. They inquire whether you consulted accountants, attorneys, or SBA guidance when calculating eligible expenses. They probe your understanding of PPP rules distinguishing W-2 employees from independent contractors. Each question aims to establish you possessed knowledge that certain expenses or payroll inclusions violated PPP regulations, then submitted the application anyway. Admissions obtained during these interviews become centerpiece evidence at sentencing, demonstrating criminal intent rather than innocent calculation errors.

Federal Sentencing in District of Connecticut

You received $150,000 PPP and obtained full forgiveness. The application claimed payroll $45,000 higher than tax documentation. Federal sentencing operates through mandatory Guidelines based on fraud loss. Loss equals the forgiven amount obtained fraudulently. Small PPP fraud ($20,000-$150,000) typically produces probation to 18 months for first-time offenders. Your $150,000 falls at this ceiling. Medium PPP fraud ($150,000-$550,000) results in 18-36 month sentences. Three factors control placement: 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. Todd Spodek has defended federal fraud prosecutions for over 40 years. Call 212-300-5196.