False Information on Forgiveness Application: Am I in Trouble?

You submitted your PPP forgiveness application. The numbers got approved. The loan disappeared from your books. And now you cannot stop thinking about whether those numbers were exactly right. Whether someone is going to notice. Whether that knock on the door is coming.

At Spodek Law Group, we understand exactly what brings you to this article at this hour. The fear. The uncertainty. The desperate hope that maybe, just maybe, forgiveness means its over. Todd Spodek has spent years defending clients facing federal investigations, and the pattern is always the same. Someone made decisions during the chaos of 2020 and 2021. Numbers got stretched. Paperwork got creative. And now the government is coming back to look at everything with fresh eyes and unlimited time.

Heres what we want you to understand from the start. You are not alone in this situation. Millions of business owners submitted PPP applications under pressure, with incomplete information, facing a pandemic that threatened to destroy everything they had built. But understanding your exposure is the first step toward protecting yourself. And thats what this article is going to help you do.

The Uncomfortable Truth About Your Approved Forgiveness

That approval letter you recieved felt like the end of something. Like the government looked at your numbers, verified them, and gave you the all-clear. Like you were safe.

You werent.

Heres what actualy happened during the forgiveness process. The SBA was drowning. Litterally millions of applications flooding in. Staff working around the clock. Political pressure to show the program was working. And a decision was made, whether anyone will admit it publically or not, to approve applications as fast as humanly possible.

95%. Thats the forgiveness rate. Not the verification rate. The approval rate for applications that got processed during the chaos. The SBA wasnt verifying your payroll numbers against your tax returns. They werent cross-referencing your employee count with state unemployment records. They were triaging an emergancy. Getting applications off there desks. Moving to the next one.

Think about it like this. You go to the emergency room during a disaster. The doctor dosent run every test. They stabilize you and move on. Thats what forgiveness was. Triage. Not verification.

The real audit? Thats happening now. Years later. When the government has time. When they have resources. When they have algorithms that can compare your forgiveness application against every peice of financial data you ever submitted to any federal agency.

And the numbers are staggering. The DOJ has already charged over 1,500 individuals with PPP fraud. Theyve seized over $1.2 billion in fraudulently obtained funds. And according to there own reports, they have hundreds of pending civil matters still working there way through the system. This isnt a program that got forgotten. This is a program thats being systematicaly examined, one application at a time.

In January 2025, a woman from Mansfield was sentanced to seven years in federal prison for PPP fraud totaling $8.5 million. Her forgiveness was approved years earlier. That approval didnt protect her from investigation. It didnt protect her from prosecution. And it definatly didnt protect her from prison.

Thats it. Thats what your approval ment.

What the Government Already Knows About Your Application

OK so lets talk about what they are actually looking at. Because most people have no idea how much information the government can access.

Your 2019 tax return. Thats the first thing. When you applied for PPP, you certified payroll costs based on certain numbers. Those numbers should match what you told the IRS. Do they? If there diferent, thats a discrepency. Discrepencies get flagged.

Your bank records. Every deposit. Every withdrawl. Every payment you made with PPP funds. The government can subpoena those records in about five minutes. And banks keep everthing. Every transaction. Every statement. Years of data sitting in servers waiting to be pulled.

Your payroll provider. Gusto. ADP. Paychex. Whatever you use. They kept records of every payment you made to every employee. Those records show exactly what you paid, when you paid it, and who you paid. If your PPP application said you had ten employes making $50,000 each, but your payroll provider shows you had seven employees making $40,000 each, thats a problem.

Your banker kept copies. Your accountant kept copies. Your payroll company kept copies.

Read that again if you need to.

Every person who helped you with that application has documentation. And when federal investigators come calling, those people have a choise. Protect you, or protect themselves. Heres a hint about which one they choose. They choose themselves. Every single time.

The uncomfortable truth is that your forgiveness application wasnt submitted into a vaccum. It was submitted into a web of interconnected data that the government can access anytime they decide your file is worth opening.

And once they decide to open it? The investigation moves fast. Subpoenas go out within days. Records get pulled from multiple sources simultaneously. Before you even know your being looked at, they may have already assembled a complete picture of what you submitted versus what actually happened.

The people who think there safe because nobody has contacted them yet are often the most surprised when the contact finally comes. The government takes its time building cases. They dont rush. They dont warn you. They just work quietly until they have everything they need.

The Forgiveness Application Creates ADDITIONAL Criminal Exposure

And heres were things get really concerning. Most people think there facing one potential problem. They lied on there original PPP application. Thats bad enough. But the forgiveness application? Thats a whole seperate issue.

WARNING: Your forgiveness application created a second, independant opportunity for federal criminal exposure.

Think about the timeline. You submitted your original PPP application in spring 2020, probably in a rush, probably under pressure, maybe without completely understanding the requirements. Some lawyers might argue you made mistakes in the chaos. Confusion. Uncertainty. Not fraud.

But then you submitted your forgiveness application. Weeks later. Maybe months later. After the initial chaos had settled. After you had time to think. After you knew exactly what the program required.

And on that second application, you certified the same inflated numbers. You doubled down on the same misrepresentations. You signed a document saying everything was accurate when you knew it wasnt.

Two applications. Two sets of lies. Two seperate federal crimes.

Prosecutors love this. They absolutley love this.

Know why? Because the forgiveness application destroys the mistake defence. You cant claim you were confused during the pandemic if you made the exact same misrepresentation months later when you had plenty of time to review the numbers. The forgiveness application shows deliberate intent. It shows you knew what you were doing. It shows you chose to lie twice.

Heres the kicker. Each application can be charged separately. Wire fraud for the original. Wire fraud for the forgiveness. False statements for the original. False statements for the forgiveness. Bank fraud. Conspiracy. The charges stack up like layers on a cake, and prosecutors love nothing more then a defendant who gave them multiple bites at the apple.

Consider the penalties your facing. Wire fraud carries up to 20 years in federal prison. When it involves a financial institution, that jumps to 30 years. Bank fraud? Also 30 years. Making false statements to the SBA? Five years per count. And remember, each application is a separate count. Each false statement is a separate count.

The federal sentencing guidelines are complex, but the baseline is clear. Even first-time offenders with no criminal history face real prison time for PPP fraud. The judges take these cases seriously. The prosecutors take them seriously. And juries dont have much sympathy for people who stole pandemic relief money while hospitals were overwhelmed and businesses were actually dying.

In 2024, three federal workers were indicted in Illinois for PPP fraud. Their applications had been approved. Their forgiveness had been granted. And then investigators cross-referenced their employment records with their PPP claims and found discrepencies. Now there facing wire fraud charges with 20-year maximums and false statement charges with 5-year maximums. The approval didnt save them. The forgiveness didnt protect them.

How Long Can They Come After You

People assume the government has a limited window. Five years, maybe. Thats what you hear. After five years, your in the clear.

Wrong.

The statute of limitations for bank fraud is ten years. For wire fraud involving financial institutions, its ten years. For making false statements to a federal agency, its five years, but related charges can extend that window.

CRITICAL: If you submitted a PPP application in June 2020, you can be charged with bank fraud until June 2030.

2030. Let that sink in.

Four more years of looking over your shoulder. Four more years of jumping when the phone rings. Four more years of wondering whether todays the day.

But wait. It gets worse.

If your forgiveness application was submitted in 2021? Add another year. 2031.

Two separate applications means two separate statute of limitations periods. The government dosent have to charge you for both at the same time. They can charge you for the original application in 2029. Then charge you for the forgiveness application in 2030. The clock runs independently for each offense.

And heres something most people dont relize. The statute of limitations can be extended in certain circumstances. If you leave the country. If you take affirmative steps to conceal the fraud. If theres an ongoing conspiracy. The ten year window can become longer.

So when you ask yourself how long they can come after you, the honest answer is this. Longer than you want to think about. Long enough that you cannot simply wait this out. Long enough that pretending its over dosent make it over.

The COVID-19 Fraud Enforcement Task Force was created specifically to investigate pandemic relief fraud. Its not going away. According to their most recent reports, they have resources allocated through at least 2027, and the cases keep coming. Every week brings new indictments, new arrests, new sentencings. The pipeline is full and its not slowing down.

And heres what keeps federal defense attorneys up at night. The government has gotten very good at these cases. They have templates. They have algorithms. They have experienced prosecutors who have done dozens of PPP fraud trials. Every case they win makes the next case easier. Every conviction adds to their track record. The 97% conviction rate isnt an accident. Its the result of years of refinement.

The Warning Signs Nobody Tells You About

Maybe your already being investigated and you dont know it. Thats more common then you think. Federal investigations are not like state investigations. Theres no knock on the door at the begining. No phone call saying your under investigation. The first sign might be the last sign before charges get filed.

But there are warning signals. Subtle ones. Things that might seem routine but actually arent.

That letter from the SBA asking for additional documentation? It wasnt routine. Routine letters dont ask for payroll records from two years ago. Routine letters dont reference specific line items from your forgiveness application. If your getting questions about specifics, someone is looking at your file.

Your bank suddenly asking about old transactions? Thats another sign. Banks cooperate with federal investigations all the time. Sometimes they reach out to customers first, maybe to give them a chance to explain, maybe just because their procedures require it. Either way, questions about historical PPP-related transactions should get your attention.

Your accountant wants to meet. Not about current taxes. About old records. About the PPP application they helped you prepare. Accountants dont randomly want to discuss old paperwork unless theres a reason. Maybe their own lawyer advised them to document their involvement. Maybe they got contacted by investigators. Maybe they just got nervous reading about prosecutions in the news. Either way, pay attention.

A former employee is suddenly interested in how the business spent PPP funds. Whistleblower rewards under the False Claims Act can be 15 to 30 percent of whatever the government recovers. Thats a strong incentive for a disgruntled ex-employee to report what they know. Or what they think they know. Or what they can piece together from what they overheard.

That routine letter from SBA? It wasnt routine.

If your accountant suddenly wants to talk about old records, pay attention.

The hardest part is not knowing. Living in limbo. Wondering whether every piece of mail contains bad news. Whether your banker knows something. Whether your former employees are talking to investigators. The uncertainty is its own punishment, and it can go on for years.

Some people live with this anxiety for months or even years. They cant talk to anyone about it. They cant tell their spouse why they wake up at 3am. They cant explain why they flinch when someone mentions PPP loans at a dinner party. The psychological toll is real, and its separate from whatever legal consequences might come.

IMPORTANT: If you recognize any of these warning signs in your own situation, you need to speak with an attorney immediately. Not next week. Not after you think about it. Now.

What You Can Do Right Now Before Its Too Late

Maybe your reading this and telling yourself its fine. Maybe your thinking the government has bigger fish to fry. Maybe your doing the math and figuring a $50,000 loan isnt worth federal resources.

Heres why thats dangerous thinking.

Algorithms dont care about your self-assesment. The same software that flags million-dollar fraud cases flags patterns in smaller loans too. Unusual payroll jumps. Employee counts that dont match unemployment filings. Forgiveness certifications that contradict tax returns. The computer dosent know your small. It just knows the numbers dont add up.

Whistleblowers can make any case a priority overnight. All it takes is one person with knowledge and a financial incentive. One former employee. One jealous competator. One bitter ex-partner. A single tip can move your file from the bottom of a pile to the top of somebodys desk.

Related investigations pull in smaller actors. Maybe your banker cut corners on lots of loans. Maybe your accountant helped other clients inflate their applications. When investigators start pulling threads, they follow every connection. Your loan might be small, but if its connected to something bigger, your getting caught up regardless.

So what can you do?

First, stop talking. Stop talking to your banker about the application. Stop talking to your accountant about discrepencies. Stop talking to business partners about what the numbers really were. Every conversation is a potential witness statement. Every admission becomes evidence.

Second, gather your records. Quietly. The original application. The forgiveness application. Your tax returns from the relevant years. Payroll records. Bank statements. You need to know exactly what the government might see if they open your file.

Third, and this is the critical one, consult with a federal criminal defense attorney. Not a business lawyer. Not your tax preparer. Someone who understands DOJ prosecutions, who has experience with financial fraud cases, who can evaluate your exposure and advise you on options.

Voluntary disclosure before investigation is diffrent than cooperation after. If you come forward proactivly, before the government knows about you, the calculus changes. Its not a guarantee of protection, but its a fundamentally diffrent posture then waiting to be caught.

The question isnt wheather you can afford an attorney. Its wheather you can afford not to have one.

Look, we understand the impulse to wait. To hope. To tell yourself that if you just dont think about it, maybe it will go away. Thats human nature. But this isnt a situation where hope helps. This is a situation where information and action make the difference between outcomes you can live with and outcomes that destroy everything youve built.

The government isnt going to forget. They have computers that dont forget. They have prosecutors who get promoted by not forgetting. The only question is whether your prepared when they finally get to your file or whether your caught completely off guard.

The Difference Between Surviving This And Not

97%. Thats the federal conviction rate. Once the Department of Justice decides to charge someone, they almost never lose. They dont bring cases they might lose. They bring cases they know they will win.

Without representation, your facing those odds alone. Your facing prosecutors who do this every day. Your facing investigators who have seen every excuse, every explanation, every attempt to minimize. Your bringing a plastic knife to a gun fight.

With the right attorney, everything changes.

The right attorney knows how federal investigations work. They know what triggers elevate a case. They know what factors make prosecutors decide to charge or decline. They know how to position a client before charges are filed, during negotiations, and if necessary at trial.

Todd Spodek has defended clients facing PPP fraud allegations, wire fraud charges, and federal financial crimes of all types. Spodek Law Group understands the specific challenges of forgiveness application cases because weve seen how prosecutors build these cases and we know where the weaknesses are.

The difference between surviving this and not often comes down to timing. Coming forward early with representation looks different than waiting until agents show up. Presenting a coherent narrative looks different than scrambling to explain inconsistencies. Having an attorney who understands federal court looks different than having someone learning on the job with your freedom at stake.

Heres what we know after years of defending these cases. The clients who do best are the ones who act before there forced to react. The ones who get ahead of the investigation. The ones who understand that hoping it goes away is not a strategy.

If your reading this article at 2am, unable to sleep, wondering what happens next, thats your answer. What happens next is up to you. You can keep wondering. Keep worrying. Keep checking the mail with your heart pounding.

Or you can pick up the phone and call 212-300-5196.

The consultation is confidential. The conversation is protected by attorney-client privilege. And for the first time since you started worrying about this, you will have someone in your corner who actually knows what your facing and what to do about it.

Spodek Law Group has built a reputation on defending clients when there futures are on the line. This is what we do. Let us help you understand your options before the government takes them away.