Deadline PPP Fraud Prosecutions

If you're reading this at 11 pm, wondering whether the government can still come after you for a PPP loan you received in 2020, you need to understand something right now. The deadline you think is protecting you probably doesnt exist anymore. At Spodek Law Group, we help clients facing federal investigations navigate the most stressful situations of their lives. We've seen what happens when people assume they're safe and find out too late that the rules have changed without them knowing. What you're about to read could change how you think about the next five years of your life.

The Deadline You Think Exists Doesn't

The thing about wire fraud is that everyone knows it has a five-year statute of limitations. That's been the rule forever. So if you got a PPP loan in April 2020 through a fintech lender or some online platform that wasn't technically a bank, you probably figured the government had until April 2025 to charge you. After that, you're free and clear. Safe. Done.

Here's the part nobody mentions.

In August 2022, Congress passed the PPP and Bank Fraud Enforcement Harmonization Act. Read that date again. August 2022. That law extended the statute of limitations for PPP fraud from five years to ten years. And it applies retroactively. That means if you got your loan in 2020, prosecutors now have until 2030 to bring charges. Not 2025. 2030.

Ten years. Not five.

The clock you've been watching was reset three years ago. You just didn't know it. Most people definitely don't. They heard somewhere that wire fraud has a five-year limit and figured they'd be in the clear soon. But Congress changed the rules specifically for PPP cases because they knew it would take years to work through the backlog of potentially fraudulent loans. They weren't being nice about extending the deadline. They extended it because they plan to use it every day of it.

So if you're sitting there calculating the months until April 2025, thinking you're almost home free, you need to recalculate. The finish line moved. And it moved five years further away than you thought.

What Actually Happens Before the FBI Contacts You

By the time an agent from the FBI or SBA Office of Inspector General actually contacts you about your PPP loan, the investigation has been running for months. Sometimes years. That business card they leave at your door or that phone call from an agent asking to "just chat" - that's not the beginning of anything. Its almost the end.

Federal PPP fraud investigations typically run for eighteen to twenty-four months before agents ever make contact with the target. Think about that for a second. While you're going about your life, assuming no news is good news, investigators are pulling bank records, reviewing your loan application, talking to witnesses, and building a case file that will eventually land on a prosecutor's desk.

Here's where it gets uncomfortable. The defendants who were charged in 2024 submitted their applications in 2020. Four years of investigation before indictment. That's the pace they're working at. So if you applied in 2020 and haven't heard anything by 2024, that doesn't mean you're safe. It might mean your case is still working its way through the pipeline.

18 to 24 months. Thats how long they watched before you knew anything was happening.

The SBA Office of Inspector General flags loans for potential fraud based on a bunch of different factors. Once they flag it, they refer it to the Department of Justice. That referral process itself can take six to twelve months. Then the DOJ assigns it to a prosecutor who opens a grand jury investigation. That's another six to twelve months. Then comes the target letter, then the indictment, then the arrest.

Federal agents don't knock on your door to start an investigation. They knock when its almost over.

How the Government Decides Who Gets Charged

OK, so here's where it gets personal. Not every PPP loan that had problems on the application ends up in federal court. The DOJ has to prioritize. They have over 130,000 loans flagged for potential fraud. They can't prosecute all of them. So how do they decide who gets charged?

Loan stacking is a big one. That's when someone submitted multiple applications through different lenders, trying to get more than one PPP loan. The algorithm catches that almost automatically now. If you applied through three fintech platforms, hoping one would approve you, and somehow got approved by all three, you're on a list.

Fabricated employees are another major trigger. Not inflated payroll numbers - actually fake employees that never existed. Creating phantom workers to juice the loan amount is the kind of thing that turns a questionable application into a criminal case real fast.

But here's the trigger that scares defense attorneys the most: cooperating witnesses.

If someone else who was involved in your loan - maybe your accountant, maybe the person who helped you fill out the application, maybe a business partner who knew what was happening - if that person gets their own target letter and decides to cooperate, suddenly your name is in federal files you never knew existed.

130,000 loans flagged. The DOJ is working through the list.

The SBA's Office of Inspector General has explicitly stated that PPP investigations will continue for years. There even investigating loans that were already forgiven. Forgiveness doesn't mean they are not looking. It just means the banks got their money back from the government. It doesn't protect you from criminal charges if the original application contained false statements.

If someone in your loan chain cooperated, your name is already on a prosecutor's desk.

Why Prosecutors Are Moving Slower Than You Expected

The reason you haven't heard anything yet might not be what you think. A lot of people assume that if the government were going to charge them, they would have done it by now. Four years have passed. Five years. How long can an investigation take?

Here's the uncomfortable truth. Prosecutors are moving slowly because they can afford to. They have ten years now, not five. And they prioritize the biggest cases first, the multi-defendant fraud rings, the million dollar schemes, the cases that will generate headlines and justify their budgets.

But the smaller cases are still in the queue. And when the big cases start clearing out, the smaller ones move up.

81%. That's the percentage of PPP fraud defendants who received prison time in 2024.

Let that sink in.

The era of probation for PPP fraud is basically over. Federal judges have lost patience with pandemic loan fraud. The defendants who got charged early in 2021 and 2022 sometimes got probation or home confinement. Not anymore. If you're sentenced in 2024 or 2025, you're statistically likely to go to federal prison.

Defendants sentenced in 2024 are getting 40% longer sentences than those sentenced in 2021, for identical conduct. Same amount of fraud, same type of scheme, same everything - except the judge's attitude has changed. What got you probation three years ago gets you eighteen months in a federal facility now.

The conviction rate is even more sobering. IRS Criminal Investigation reports a 97.4% conviction rate in prosecuted COVID fraud cases. If they decide to charge you, you're almost definitely going to be convicted. The only question is how long you're going to serve.

As of December 2024, the DOJ has charged 3,096 defendants with PPP fraud. 2,532 have already been found guilty. 81% of those sentenced received prison time. Those numbers don't lie about where this is heading.

The Cooperator Problem Nobody Talks About

Here's what defense attorneys know that their clients don't want to hear: the first person to cooperate gets the best deal.

Federal sentencing works under Section 5K1.1 of the sentencing guidelines. If you provide "substantial assistance" to prosecutors - meaning you give them information that helps them prosecute other people - they can file a motion to reduce your sentence below the guideline range. Sometimes significantly below.

But here's the thing about substantial assistance. It has to actually be helpful. And the first person who walks in with information has the most valuable information. The second person has less value because prosecutors already know some of what they're going to say. The third person has even less.

Every day you wait, someone else might be beating you to the prosecutor's office.

Think about everyone who was involved in your PPP loan. Your accountant. Your bookkeeper. The person who prepared the application. Any business partners. Anyone who knew what the payroll numbers actually were versus what went on the application. Any of those people could get their own target letter tomorrow. And when they do, their lawyer is going to tell them the same thing every defense attorney tells their client: the first one to cooperate wins.

If you're not first, you're last to know what evidence they have against you.

The defendants who got the longest sentences in 2024 were the ones who waited, assumed they were fine, and then got blindsided when their co-defendants flipped. By then it was to late. The cooperation window had closed. There was nothing left to offer.

What Your PPP Loan Preparer Knows About You

That person you paid to help with your PPP application - whether it was an accountant, a loan preparer, or some guy who advertised on Instagram that he could "get you approved" - that person knows exactly what was on your application. They know if the numbers were accurate. They know if the employee count was real. They know everything.

And if they helped more than just you, they have a list.

Loan preparers who assisted dozens of clients with questionable applications have a massive incentive to cooperate. Why? Because 30 client names are worth more than one. Prosecutors know this. Defense attorneys know this. The only people who don't seem to know it are the clients themselves, sitting at home, assuming nobody would ever say anything.

In the Florida sheriffs deputy PPP fraud case, a loan preparer named Haydee Rivero helped around twenty people submit fraudulent applications. When she got caught, she pleaded guilty and cooperated. She definitely named names. She went through client files with investigators. She explained exactly what each client knew and when they knew it. And she got a lighter sentence for doing it.

Your loan preparer has every incentive to trade your name for their freedom.

That's the system working as designed. Prosecutors don't have the resources to investigate every loan from scratch. So they find one person in a fraud ring, flip them, and use their testimony to build cases against everyone else. The person who flips first gets the reward. Everyone else gets the consequences.

Here's the kicker. Proffer sessions - the "queen for a day" meetings where cooperators tell prosecutors everything they know - are happening right now. These things are happening in federal courthouses across the country. And your name might be coming up in one of them.

When Silence Becomes Strategy

Not everyone reading this actually committed fraud. Look, here's the thing - some people used their PPP funds correctly, did everything by the book, and are just anxious because they've seen the headlines. They want to know they're in the clear. And maybe they are.

The difference between stretched payroll numbers and fabricated employees is the difference between a civil issue and federal prison. Context matters. Not every questionable application results in prosecution. Sometimes it's an administrative issue. Sometimes it's a civil penalty. Sometimes it's nothing at all.

But that distinction only matters if you understand your exposure before prosecutors define it for you.

If you never inflated your numbers, never created fake employees, never misused the funds after you received them, and can document everything you claimed, you're probably fine. Anxious, but fine. The government isn't going after people who made honest applications just because the pandemic was chaotic.

But if you're reading this and there's a knot in your stomach because you know something wasn't quite right, that silence might not be protecting you. It might just be delaying the inevitable.

Knowing where you stand before prosecutors define it for you. That's the whole game.

Sometimes silence is a strategy. But only if it's informed silence, not wishful thinking.

What to Do If You're Worried About Your PPP Loan

If you're reading this because you're genuinely concerned about a PPP loan you received - not just curious, but actually worried - here's what you need to understand about the next steps.

First, don't talk to anyone about your concerns except an attorney. Not your accountant. Not your business partner. Not your spouse. Anyone you talk to can potentially be compelled to testify about that conversation. Attorney-client privilege is the only conversation that's protected.

Second, gather your documents. Bank statements from 2020 and 2021. Payroll records. Tax returns. The original PPP application. Anything that shows what you claimed and what was actually true. You don't need to give these to anyone yet. But having them organized means your attorney can assess your exposure faster.

Third, understand the timeline. You may have years before anything happens. Or you may get a target letter next week. There's no way to know from the outside. But being prepared is not the same as panicking.

Attorney Todd Spodek and the team at Spodek Law Group have represented clients in federal PPP fraud investigations across the country. We understand how these cases work from the inside. We know what triggers prosecution, what factors influence sentencing, and how to position clients for the best possible outcome - whether that's avoiding charges entirely, negotiating a favorable resolution, or mounting an aggressive defense at trial.

One phone call. That's the first step.

You can reach Spodek Law Group at 212-300-5196. The consultation is confidential. We dont judge. We just help you understand where you stand and what your options are going forward.

The deadline for PPP fraud prosecutions isnt what most people think it is. Its not 2025. Its 2030 and beyond. That gives prosecutors alot of time. But it also gives you time to get your defense in order before the knock comes. If it comes.

Dont wait until your the last person standing without a chair.