Delaware EIDL Loan Fraud Lawyers

Delaware EIDL Loan Fraud Lawyers

FBI Baltimore or SBA Office of Inspector General agents contacted you about your Economic Injury Disaster Loan application. The investigation targets revenue figures that don’t match your Delaware business tax returns, employee counts you can’t verify with payroll records, economic injury claims that seem inconsistent with your actual operations. You’re in Delaware, prosecuted in District of Delaware federal court. Agents appeared with questions about 2019 gross revenue calculations, whether your business employed the workers you listed, whether pandemic impact justified the loan amount you received. 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, EIDL cases in District of Delaware.

The $10K Advance Trap

Your Delaware business applied for EIDL during pandemic emergency in 2020. SBA streamlined applications, processed loans within days instead of the usual weeks-long review. You calculated 2019 gross revenue based on what seemed reasonable – bank deposits, revenue estimates, projections from partial-year operations. The application asked for employee count. You listed workers who helped during busy periods, contractors who performed essential functions, family members involved in operations. SBA approved your loan within days. The approval included $10,000 advance payment SBA called a “grant” in program documentation. SBA materials described the $10,000 as “non-repayable” regardless of loan outcome. You believed the advance functioned separately from the loan itself – emergency cash that carried no fraud liability even if loan application contained errors. Delaware business owners throughout the state operated under this assumption. The “grant” language seemed definitive. If SBA forgave the main loan or you repaid it, the $10,000 stayed separate from any fraud analysis. This assumption creates federal criminal exposure. If your EIDL application contained false statements when submitted – revenue inflated beyond what tax documentation supports, employees fabricated or exaggerated, economic injury claims inconsistent with business operations – those false statements constitute wire fraud under 18 USC Section 1343 and false statements to SBA under 18 USC Section 1014. The total amount you received, including the $10,000 advance, equals your fraud loss for federal sentencing purposes. District of Delaware prosecutors count the “grant” toward Guidelines calculations. The language SBA used in program materials doesn’t protect you from criminal prosecution if the underlying application contained knowing false statements.

Delaware business owners confront this question: when do revenue estimates made during pandemic emergency cross into federal crimes?

Your 2019 tax return documented $180,000 revenue. Your EIDL application claimed $400,000 annual gross revenue. You calculated based on projections before pandemic disrupted operations, estimates of what the business would have generated without government shutdown orders, revenue figures that seemed defensible under extraordinary circumstances. Federal prosecutors examine the gap between tax documentation and application figures. That $220,000 difference becomes evidence of intentional fraud if prosecutors can demonstrate you knew the revenue claims exceeded what business records could support.

FBI Investigations and Sentencing

FBI Baltimore agent contacts your Delaware business. “We need to verify some information about your EIDL application.” The phrasing sounds administrative – routine follow-up, documentation review, nothing suggesting criminal investigation. Delaware business owners respond without defense counsel present. You explain your revenue calculations, how you arrived at employee counts, why you believed the business qualified for the loan amount you received. The agent appears friendly, understanding, takes detailed notes about your business operations during 2019 and how pandemic conditions affected your calculations.

Investigators already possess your complete financial documentation through grand jury subpoenas issued months before contacting you. They obtained tax returns via IRS administrative summons – Schedule C for sole proprietors, corporate returns for entities. They pulled your original EIDL application from SBA’s database. They examined bank records to verify deposit patterns, business operations, expense documentation. They reviewed quarterly payroll tax filings with IRS, or noted the absence of such filings if you claimed employees but never submitted 941 forms. They cross-referenced credit card processing statements, accounts receivable records, sales documentation against your claimed revenue figures.

They know the discrepancies before the interview begins.

The interview seeks admissions proving criminal intent. Statements where you acknowledge understanding EIDL eligibility requirements but inflating figures to qualify for larger loan amounts. Acknowledgment that revenue estimates exceeded what tax returns documented. Admission that employee counts included workers not on formal payroll. These admissions transform application errors into federal crimes by demonstrating you knew the statements were false when submitted.

You received $150,000 EIDL loan plus the $10,000 advance – total of $160,000. Your application listed $400,000 annual revenue and 8 employees. Tax returns documented $180,000 revenue, and you never filed quarterly payroll reports showing any employees. The application overstated revenue by $220,000 and fabricated 8 workers. District of Delaware federal court follows sentencing Guidelines that calculate prison time based on fraud loss – the amount you received through false statements, not what you intended to take. Your $160,000 controls the sentencing calculation. Whether District of Delaware judges impose prison time or probation depends on this loss figure combined with your criminal history and whether you accept responsibility. Department of Justice data from December 2024 shows 81% of pandemic fraud defendants received prison time according to official statistics. The constitutional requirement that prosecutors prove criminal intent provides defense opportunities, but admissions during FBI interviews make that burden easier for government to meet.

Call 212-300-5196.