Denver EIDL Loan Fraud Lawyers

Denver EIDL Loan Fraud Lawyers

FBI Denver contacted you about your EIDL advance – that $10,000 SBA deposited three years ago and explicitly called a “grant” in every official communication. You’re prosecuted in District of Colorado federal court covering Denver, Boulder, Colorado Springs, Fort Collins, the entire Front Range. FBI Denver or SBA Office of Inspector General agents appeared at your Denver business asking about revenue discrepancies between your EIDL application and tax returns filed with IRS, employee counts that don’t match payroll records, whether your business actually operated during 2019. 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 Colorado.

SBA Called It a “Grant” – Why Federal Prosecutors Don’t Care

Denver business owners applied for EIDL through SBA’s online portal during 2020 or 2021. Restaurants closed, service businesses lost revenue, retail stores operated at reduced capacity. The application asked for revenue figures, employee counts, basic business information. SBA’s automated system processed applications within days. Then $10,000 appeared in business accounts – the EIDL advance. SBA documentation used the word “grant” repeatedly. Official communications stated explicitly: this advance doesn’t require repayment even if your full EIDL loan application gets denied, even if you choose not to accept the loan.

That characterization created confusion federal prosecutors in District of Colorado now exploit. Denver business owners reasonably believed SBA’s own language meant the $10,000 carried no repayment obligation, therefore no fraud liability. Three years pass. FBI Denver contacts you about application discrepancies. The investigation focuses on whether false statements appeared in your EIDL application when originally submitted – revenue figures inflated beyond what tax returns documented, employee counts exceeding actual W-2 workers on payroll, fake business entities created solely to access pandemic funds.

The Legal Trap

Federal prosecutors throughout District of Colorado charge wire fraud under 18 USC Section 1343. The “grant” characterization doesn’t matter for criminal liability purposes. What matters: you obtained $10,000 from the federal government through false statements transmitted electronically across state lines. That $10,000 counts toward fraud loss calculation under federal sentencing Guidelines federal judges must follow. District of Colorado prosecutors view the EIDL advance identically to the full loan amount for sentencing purposes.

Revenue Calculation Errors Versus Deliberate Fraud

Your Denver business had irregular income during 2019. Service sector revenue fluctuates. Seasonal businesses face calculation challenges. The EIDL application required gross revenue figures, but your accounting records tracked net income differently. You estimated based on what seemed reasonable. Employee counts posed similar challenges – workers came and went, contractors performed functions you considered employment-like, precise headcount numbers proved elusive during pandemic disruption.

Denver business owners face this constitutional question: when does estimate cross into criminal territory? Federal prosecutors must prove intent – that 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. These statutory limits don’t control actual sentencing. Guidelines based on loss amount determine prison time. But the constitutional burden requiring proof of criminal intent remains.

District of Colorado Prosecution Patterns

Prosecutors examine application accuracy at submission time. They don’t care whether errors resulted from negligence, calculation mistakes, or accounting confusion. The distinction between honest error and deliberate fraud matters constitutionally but proves difficult establishing once criminal charges are filed. You claimed revenue figures based on bank deposits without accounting for returns, refunds, or non-revenue deposits. You included seasonal workers who technically weren’t employees during the measurement period SBA regulations specified. You rounded calculations upward because precise figures seemed impossible to determine during 2020’s chaos. Each decision creates criminal exposure if prosecutors demonstrate you understood EIDL eligibility rules and deliberately violated them.

FBI Investigations

An FBI Denver agent calls your business. “We need to verify some EIDL application information.” Sounds administrative. It’s criminal investigation designed to obtain admissions demonstrating intent. Denver business owners respond without counsel, unaware investigators already possess complete financial records. They subpoenaed bank statements months earlier through grand jury process. They pulled tax returns via IRS administrative summons. They obtained your original EIDL application from SBA’s database, examined business records filed with Colorado Secretary of State.

They know the discrepancies.

Agents compare application revenue claims against tax returns filed with IRS. They examine payroll records to verify employee counts. They review business formation documents to confirm the entity existed and operated during the time period you claimed. Any inconsistency between the application and independently verified records becomes evidence supporting false statement charges. The interview seeks admissions – statements where you acknowledge understanding EIDL rules, knowing your calculations were incorrect, submitting the application anyway because you needed pandemic funds.

Sentencing Guidelines

You received $150,000 EIDL loan plus the $10,000 advance. Your application overstated revenue by $55,000 compared to tax documentation. Federal sentencing in District of Colorado operates through mandatory Guidelines based on fraud loss amount. Loss equals total EIDL funds obtained through false statements – including that $10,000 advance SBA called a grant. Small EIDL fraud ($10,000-$50,000) typically produces probation to 18 months for first-time offenders. The $10,000 advance alone, if obtained fraudulently, places you in this bracket. Medium EIDL fraud ($50,000-$250,000) results in 18-36 month sentences. Your $160,000 total falls here. Three factors determine specific placement: loss amount weighs heaviest, criminal history second, acceptance of responsibility third. According to Department of Justice data from December 2024, 81% of pandemic fraud defendants received prison time. Todd Spodek has defended federal fraud prosecutions for over 40 years. Call 212-300-5196.