Detroit PPP Loan Fraud Lawyers
You got a PPP loan during the pandemic. Maybe it was 2020, maybe 2021. Everyone was doing it - the government was handing out money to keep businesses alive, and you took what was offered. You filled out the application, got approved, used the funds however you used them. Years passed. The pandemic ended. You moved on with your life and assumed the government had moved on too.
It hasn't.
The federal government turned PPP loan fraud prosecution into an assembly line - and Detroit is directly in the crosshairs. The Eastern District of Michigan covers Detroit, Ann Arbor, Flint, and the surrounding region. This district hands out sentences 29% longer than the Western District of Michigan for identical conduct. Congress extended the statute of limitations to 10 years. That 2020 loan you thought was forgotten? It's prosecutable until 2030.
Welcome to Spodek Law Group. We handle federal PPP loan fraud defense in Detroit and throughout the Eastern District of Michigan. If you're under investigation, if you've received a letter from the SBA Office of Inspector General, or if federal agents have shown up asking questions - this article explains what you're facing and what options might still exist.
Why Detroit Is Ground Zero for PPP Fraud Prosecution
In August 2022, President Biden signed the PPP and Bank Fraud Enforcement Harmonization Act. Most people completley missed what it actualy did.
It extended the statute of limitations from 5 years to 10 years - retroactively.
That means a PPP loan from 2020 is prosecutable until 2030. A loan from 2021 until 2031. The government gave itself a full decade to come for you. And there using every day of it. The COVID-19 Fraud Enforcement Task Force coordinates across FBI, IRS Criminal Investigation, SBA OIG, and other agencies. They have strike forces. There organized. And Michigan is on there list.
The Eastern District of Michigan covers Detroit and the eastern half of the state. This is one of the most aggressive districts in the country for pandemic fraud prosecution. Your not imagining it.
Heres something that practitioners know but rarely discuss publicly. The Eastern District of Michigan averages 27 months in federal prison for PPP fraud amounts between $500,000 and $1 million. The Western District of Michigan - same state, same laws, same federal sentencing guidelines - averages 21 months for identical amounts. Twenty-nine percent longer. Same conduct. Different courthouse.
U.S. Attorney Jerome F. Gorgon Jr. for the Eastern District of Michigan has been explicit: "Even though the PPP Program has ended, our mandate to investigate and redress the harm from fraudulent and improper PPP loans continues." That's not rhetoric. That's policy.
The Numbers Behind the Prosecution Machine
According to Pandemic Oversight, as of December 31, 2024:
- 3,096 defendants have been charged with pandemic relief fraud
- 2,532 defendants have been found guilty (82%)
- 1,741 received prison time (81% of those convicted)
- 2,008 were ordered to pay restitution (94%)
- The IRS Criminal Investigation division achieved a 97.4% conviction rate in prosecuted cases
Prison sentences have ranged from 1 day to 30 years, with the majority falling between 1 and 5 years. More then 440 defendants were ordered to pay $1 million or more in restitution.
The SBA Office of Inspector General has recieved more than 250,000 hotline complaints since the pandemic began. From those, there data analytics team identified more than 95,000 actionable leads - representing, according to their own testimony, "more than 100 years of investigative case work."
Thats not a backlog. Thats a pipeline. And Detroit is in it.
The median time from initial referral to indictment has decreased dramaticaly. What used to take 8-12 months now takes 4-6 months. The government has gotten faster, more efficient, and more ruthless. There processing cases like an assembly line becuase thats exactley what it is.
Small Loan, Detroit Federal Prison
"Do people actualy go to prison for a $20,000 PPP loan?"
Yes.
A Cincinnati defendant got 18 months in federal prison for $21,000 in PPP fraud. March 2025. The amount doesn't protect you. Federal judges in 2025 include prison time in nearly every PPP fraud sentencing - regardless of the amount involved.
In Michigan, the sentencing patterns are clear. Small loans between $10,000 and $50,000 can result in probation to 12 months. Medium loans between $50,000 and $250,000 typically result in 18 to 36 months federal prison. Loans over $250,000 can result in 36 to 120 months.
Recent Detroit-area cases:
- Tracey Dotson (Detroit): Sentenced to 51 months in February 2025 for a multi-state pandemic fraud scheme involving roughly $1 million
- Dr. Reginald Eburuche (Southfield): Convicted by federal jury in May 2025 for $1.7 million PPP fraud. He "grossly inflated the number of employees and the average monthly payroll" and created fraudulent tax documents
- Rita Shaba, Samer Kammo, and Christina Anasi (Macomb County): Pleaded guilty to a $3+ million PPP fraud scheme. Sentencing scheduled for January 2026
- Ryan Carruthers (Commerce Township): Charged with obtaining $851,000 through 14 loans for ficticious businesses including "Cobra Kai Karate" and "Pure Juice Bar & Cafe"
The PPP program itself doesn't have criminal provisions. The CARES Act isn't a penal statute. So how are people going to federal prison?
The DOJ uses pre-existing fraud statutes to prosecute PPP fraud. One application can trigger multiple charges:
- Wire Fraud (18 U.S.C. § 1343) - 20-30 years
- Bank Fraud (18 U.S.C. § 1344) - 30 years
- False Statements to SBA (18 U.S.C. § 1014) - 30 years
- Money Laundering (18 U.S.C. § 1956) - 20 years
- Aggravated Identity Theft (18 U.S.C. § 1028A) - mandatory +2 years consecutive
The Macomb County trio - Shaba, Kammo, and Anasi - face all five charge types. Theoretical exposure exceeding 100 years. From one application.
What to Do Before It's Too Late
There's something most people don't understand about PPP fraud investigations.
There's a window - typically six to twelve months - between when the SBA OIG flags a loan and when the case gets referred to the FBI for criminal investigation. During this window, there is leverage that completely disappears once criminal charges are filed.
During the OIG review stage, civil disposition may still be possible. Repayment plus a fine. Maybe a False Claims Act settlement. Not pleasant, but not a federal felony conviction either.
Look at the civil settlements in Michigan. LaFontaine Management, affiliated with a major metro Detroit auto dealer, paid $1.5 million to settle allegations without criminal charges. Four Michigan businesses collectively paid $1.9 million. Monofrax LLC paid nearly $2 million.
What do these companies have in common? They resolved during the OIG window. Before FBI referral.
Once the FBI gets involved, that window closes.
But here's the trap most people fall into.
Some people, panicking, decide to voluntarily repay the loan thinking it will make the problem go away. The DOJ has explicitly stated that voluntary repayment can be used as evidence of consciousness of guilt. Returning the money doesn't make it go away - it can actually strengthen the government's case against you.
This is complicated. The timing matters enormously. Whether to repay, when to repay, how to structure any resolution - these decisions require counsel who understands how federal prosecutors think.
The single most important rule:
Never talk to federal agents without a lawyer present.
This sounds obvious. But there have been cases where people who decided to talk to investigators without counsel ended up being charged with obstruction or making false statements to federal agents - in addition to the underlying PPP fraud. 18 U.S.C. 1001 adds up to 5 years. The agents seem friendly. Cooperative. They're not on your side.
Todd Spodek has handled PPP fraud cases in the Eastern District of Michigan. He understands the difference between OIG-stage investigations where civil resolution may be possible, and FBI-stage investigations where criminal defense becomes the priority.
When You're Ready
If you're in Detroit - or anywhere in Michigan - and you're facing a PPP loan fraud investigation, Spodek Law Group can help you understand where you stand and what options exist.
The consultation is free. There's no obligation.
What you'll get is an honest assessment. Is this still at the OIG stage where civil resolution might be possible? Has it been referred to the FBI? What does the evidence look like? What are realistic outcomes - not best-case fantasies, but actual possibilities based on how these cases play out in the Eastern District of Michigan?
Call us at 212-300-5196. The statute of limitations runs until 2030 or 2031 depending on when you got the loan. The government has time. But once they move, things happen fast. The earlier you have counsel, the more leverage exists.
Don't wait until federal agents show up at your door.
Were here when you need us.
