Denver PPP Loan Fraud Lawyers
You got a PPP loan in 2020. Maybe 2021. Everyone in Denver did - small businesses scrambling to survive, the government practically handing out money through the pandemic chaos. You filled out the application, probably got help from an accountant or did it yourself at 2am, got approved, used the funds, maybe even got forgiveness. Years have passed. You assumed the federal government had moved on to bigger problems.
You're in the wrong city for that assumption.
The federal government turned PPP loan fraud prosecution into a machine - and they built one of the command centers right here in Denver. On July 11, 2023, the Attorney General personally selected the District of Colorado to lead one of five national COVID-19 Fraud Strike Force Teams. Not five hundred districts. Not fifty. Five. Denver is one of them. The U.S. Attorney's Office has 40 to 50 active PPP fraud investigations right now, representing approximately $75 million in alleged fraud. The 10-year statute of limitations means that 2020 loan you thought everyone forgot? It's prosecutable until 2030.
Welcome to Spodek Law Group. We handle federal PPP loan fraud defense in Denver and throughout the District of Colorado. If you're under investigation, if SBA agents have contacted you, or if you've received a target letter - this article explains what you're actually facing in what has become the most aggressive PPP prosecution district in the country.
Why Denver Is Different: Strike Force Headquarters
Most people assume Colorado is a quiet federal district. Mountains, ski towns, maybe some drug cases near the border. The kind of place where white-collar fraud would be a low priority.
That assumption is completley wrong.
The Department of Justice established the COVID-19 Fraud Enforcement Task Force to coordinate pandemic relief prosecutions across federal agencies. Within that task force, they created Strike Forces - dedicated teams in specific districts to handle the most complex and highest-volume cases. On July 11, 2023, Attorney General Merrick Garland selected five districts to lead these Strike Forces.
Denver was one of them.
According to Denver7 News, the U.S. Attorney's Office in Colorado has four prosecutors dedicated to Strike Force work - two full-time, two part-time. They are actively investigating 40 to 50 cases worth aproximately $75 million. Those are open files. Active investigations. People who haven't been charged yet but are in the pipeline.
Here's what makes Colorado particularly dangerous. Many PPP loans were funded through banks headquartered in Colorado. That creates federal jurisdiction in Denver even for defendants who don't live here. Your prosecuted in the District of Colorado because the bank that processed your loan was based here - even if you've never set foot in the state. The Strike Force uses this jurisdictional hook to centralize cases from across the country.
The data analytics team runs algorithms that flag anomalies before any human investigator even looks at your file. Inflated payroll numbers. Tax forms that dont match IRS records. Employment figures that seem impossible for a company of your size. By the time FBI agents knock on your door, the case is already built.
The Cases Already Filed in Colorado
These aren't hypotheticals. Real Denver-area defendants. Real sentences. Real families destroyed.
Recent District of Colorado PPP fraud cases:
- Richard Nieto (Morrison): Sentenced to 46 months in federal prison for $913,000 in fraudulent PPP loans. Used the money for bitcoin purchases, gold and silver coins, contributions to an investment account, and funding a friend's startup business. Ordered to pay $962,438.85 in restitution.
- Charles Lacona Jr. (Colorado Springs): Found guilty by a federal jury. 24 months in federal prison for $513,000 in PPP fraud. Inflated payroll costs, fabricated tax documents, submitted false IRS forms. Purchased a Cadillac CT6 for $67,704. Restitution of $549,274.
- Joshua Lybolt (Castle Rock): Indicted July 2024 for aproximately $5 million in COVID relief fraud. Used funds for a 2022 Porsche Taycan, a Range Rover, country club memberships, and real estate. Case pending.
- Joseph Trenkle (Cherry Hills Village): Charged May 2025 with wire fraud and money laundering. Nearly $5 million in PPP and EIDL funds obtained. Case pending.
- Shambrica Washington (formerly of Colorado): Found guilty by federal jury on 31 counts including wire fraud, bank fraud, money laundering, and false claims. Nearly $500,000 in PPP fraud through her luxury baby boutique business.
Richard Nieto's case shows how federal investigators work. He submitted three fraudulent PPP applications for his painting business. He inflated employee counts and average monthly payroll. He fabricated IRS Forms 941 that didnt match his actual tax returns. Then he transfered the loan money through multiple accounts and spent it on personal investments. The IRS traced every single transaction.
Forty-six months. Almost four years in federal prison. For a painting contractor from Morrison.
Charles Lacona fought his case at trial. Lost. Twenty-four months. The jury didn't believe his explanations. He bought that Cadillac with loan money the government says was supposed to go to employees who didnt exist.
The spending pattern proves the fraud. Porsche Taycan. Bitcoin. Country club memberships. Private school tuition. When prosecutors show a jury that someone took pandemic relief money and bought luxury items, the conviction is almost automatic. These purchases become Exhibit A.
What Triggers a Colorado PPP Investigation
The Strike Force operates differently than traditional federal prosecution. Prosecutor-led and data analyst-driven. That means investigations often begin with algorithms, not tips.
Defendants facing PPP fraud charges in Colorado typically triggered investigation through one or more of the following patterns:
- Payroll figures that dont align with quarterly tax filings
- Employee counts that exceed industry norms for stated business size
- Multiple applications from businesses with overlapping ownership
- Forgiveness applications that contain inconsistencies with original loan documents
- Bank records showing immediate transfer of funds to personal accounts
- Purchases of assets (vehicles, real estate, luxury goods) shortly after loan disbursement
The SBA Office of Inspector General maintains sophisticated data analytics capabilities. They cross-reference loan applications against IRS records, state employment databases, and bank transaction data. When anomalies appear, the file gets flagged for human review.
One PPP application can generate multiple federal charges:
- Wire Fraud (18 U.S.C. § 1343) - 20 to 30 years per count
- Bank Fraud (18 U.S.C. § 1344) - 30 years per count
- Money Laundering (18 U.S.C. § 1956) - 20 years per count
- False Statements (18 U.S.C. § 1014) - 30 years per count
Steve Howe, a Denver man, was charged with 27 counts on one PPP scheme involving $1.2 million. Twenty-seven separate charges. Each carries potential decades of imprisonment. Thats the math.
The conviction rate for PPP fraud nationally exceeds 82%. Of those convicted, 81% receive prison time. These arent probation cases.
What Happens Next
There's a window - typically six to twelve months - between when SBA OIG flags a loan and when the case gets referred to the FBI for criminal investigation. During this window, options exist that completely disappear once charges are filed.
The same Strike Force resources that make Colorado dangerous also create opportunity. Prosecutors have caseloads. They want to move files. A defense attorney who understands this dynamic can sometimes negotiate civil disposition - repayment plus administrative penalties rather than criminal prosecution. False Claims Act settlements happen. They're not pleasant, but they're not federal felony convictions either.
But that window closes.
Once the FBI takes the case, once the grand jury indicts, the leverage shifts entirely to the government. The 82% conviction rate exists for a reason. Federal prosecutors don't bring cases they expect to lose.
Look, theres one rule that matters more than anything else if your facing PPP scrutiny in Colorado:
Never talk to federal investigators without a lawyer present.
This sounds obvious. But people panic. They think they can explain. They think the friendly agent just wants to clear up a misunderstanding. They're wrong. Every word you say becomes potential evidence. Worse - if you make a statement that's inconsistent with documents the government already has, you've just committed a new federal crime. Making false statements to federal agents under 18 U.S.C. § 1001 is a separate five-year felony. I've seen cases where people who talked without counsel ended up facing additional charges they wouldn't have faced if theyd stayed silent.
Todd Spodek understands how the Strike Force operates in Colorado. The difference between OIG-stage investigations where civil resolution may be possible, and FBI-stage investigations where criminal defense becomes the priority. The leverage points. The timing that matters.
When Your Ready
If you're in Denver - or anywhere in Colorado - and you're facing PPP loan fraud investigation or concerned that you might be, Spodek Law Group can help you understand where you actually stand.
The consultation is free. Theirs no obligation.
What you'll get is an honest assessment. Is this still at the OIG stage? Has it been referred to the FBI? What does the evidence likely look like? What are realistic outcomes - not best-case fantasies, but actual possibilities based on how these cases have played out in the District of Colorado?
Call us at 212-300-5196. The statute of limitations runs until 2030 or 2031 depending on when you got the loan. The Strike Force has time. They have resources. They have 40 to 50 active files on their desks right now.
The question is whether your file is one of them. And if it is, what you do next determines everything.
Were here when you need us.
