False Statements Charge (18 USC 1001) for SBA Loan Fraud

The paperwork. That's what keeps you up at night. The numbers you put on that PPP application back in 2020. The employee count you listed. The payroll figures you calculated. The eligibility boxes you checked. Maybe you stretched things a little. Maybe someone else filled it out and you just signed where they told you. Maybe you genuinely believed everything was accurate at the time but now you're not so sure what was real and what was hopeful thinking. Whatever happened back then, you found your way here because something changed. A letter arrived. An agent called. A knock came at your door.

At Spodek Law Group, we understand exactly what you're going through right now. We've represented hundreds of clients facing federal investigations related to SBA loan programs, and we know that the fear you're experiencing is based on real stakes with real consequences. This isn't paranoia. This is a legitimate concern that deserves serious attention. Our mission is to stand between you and the full weight of federal prosecution before it's too late to make a difference. Todd Spodek and our team of federal defense attorneys have spent years navigating cases exactly like yours.

But heres the thing you need to understand before anything else gets discussed. The application isnt where this case gets won or lost. The real danger isnt buried in what you already wrote on that form years ago. Its hiding in what your about to say when investigators come calling.

Why 18 USC 1001 Is Different From What You Think

Most people searching for information about 18 USC 1001 think they already know what they're dealing with here. False statements on a federal form. Lying on a loan application. Making up numbers to get money you weren't entitled to. Submitting fraudulent documentation to the Small Business Administration. Thats what you probably assume this whole thing is about.

Read that again. Because its fundamentally wrong.

18 USC 1001 doesn't just cover written statements on federal applications and loan forms. It covers any materially false statement made to a federal agency or federal agent in any matter within there jurisdiction. Oral statements count just as much as written ones. Casual conversations count. The doorstep chat with the FBI agent who showed up unannounced at your home or business counts. The phone call you thought was informal counts. The interview you thought was your chance to finally explain yourself and clear things up definitely counts most of all.

Heres the thing nobody tells you about federal fraud investigations into SBA loan programs. The paperwork problems on your original loan application might actually be remarkably hard for prosecutors to prove beyond a reasonable doubt. The numbers are messy because COVID created chaos for everyone. The intent is genuinely unclear when programs were designed in the days and implemented with minimal guidelines. Third parties were involved in preparing applications. Records are incomplete or contradictory. Years have passed since the applications were submitted. Witnesses have scattered across the country. Memories have faded. Businesses have closed.

But the conversation your about to have with federal agents? That's clean. That's recorded word for word. That's witnessed by trained professionals. Thats provable beyond any reasonable doubt in any courtroom.

Think about this for a moment. The government might struggle to prove you knew your employee count was wrong in March 2020 during a global pandemic, when everyone was confused. But they have absolutely no trouble proving you said something false last Tuesday when they asked you about it and recorded the whole thing.

The interview designed to help you explain yourself is actually designed to create the crime that convicts you.

The Three Words That Create Federal Crimes

No I didnt.

Three words. That's all it takes to become a federal felon. If an FBI agent or SBA-OIG investigator asks you whether you inflated your employee count on that application, and you say "no, I didn't" when the answer was actually yes, you have just committed a separate federal felony under 18 USC 1001. Not the fraud they were asking about. A completely new crime created in that moment.

You probably think denying wrongdoing is your fundamental right as an American. You probably think theres some kind of reasonable exception for simply saying you didnt do something you believe your being falsely accused of. After all, shouldnt you be able to deny accusations against you without automatically creating new federal crimes in the process?

The Supreme Court of the United States eliminated this defense in 1998. The case was Brogan v United States and it changed everything about how federal investigations work. The defendant James Brogan was a union official asked by federal agents wheather he received cash payments from employers who had union contracts. He said no. He had in fact received those cash payments. The Supreme Court held that even a simple denial of guilt violates 18 USC 1001 if the denial is knowingly false.

Theres no "exculpatory no" exception in federal law anymore. Theres no casual conversation exception that protects informal statements. Theres no I-was-just-defending-myself exception that makes self-protective lies acceptable. There's no I was scared and panicked " exception.

Any knowingly false statement made to a federal agent is a seperate federal crime carrying its own prison sentence. Materiality dosent require that the government actually relied on your specific statement to make any decision. It only requires that your statement was capable of influencing the investigation. And of course your denial was capable of influencing the investigation. That is precisely why they asked you the question in the first place.

Three words. Five years federal prison as a maximum sentence. Up to $250,000 in fines that you personally owe. A felony conviction on your permanent record. And thats all on top of whatever other charges existed before you opened your mouth and made things worse.

When Investigators Already Know The Answers

They didnt come to your door to learn something new from you.

OK so heres the thing about federal investigations that most people completely fail to understand until its far too late. By the time an SBA-OIG agent or FBI agent shows up at your door asking questions about your PPP or EIDL loan, they have already done months or sometimes years of intensive investigative work. They have subpoenaed your bank records going back years. They have pulled your IRS filings for every relevant year. They have cross-referenced your loan application against your federal tax returns. They have run your claimed employee count against state unemployment insurance records. They have compared your payroll claims to your quarterly 941 employment tax filings.

The questions arnt genuine questions seeking information. There tests designed to catch you.

When they ask how many employees you had in February 2020, they already know exactly what answer the documents support. What they want to see is wheather your answer today matches what the paperwork shows. If your answer dosent match, they have just created a fresh 1001 violation in real time. Recorded on there notes and possibly on audio. Witnessed by at least two agents who will testify. Provable beyond reasonable doubt.

Look, this isnt like a friendly conversation with your accountant were your both trying to figure out the correct numbers together. This isn't a genuine fact-finding mission where everyone is working toward the same goal. The actual investigation has already happened before they knocked. The questions are not questions. The questions are the trap.

Here's where most people make their critical mistake that destroys their cases. They think complete honesty will help them because they're basically good people who made some mistakes. They think if they just explain the whole situation in context, the agents will understand the pressure they were under in 2020. They think the interview is there chance to finally clear things up.

It isnt. The interview is there chance to catch you in a discrepancy between your statements and there documents. Even an honest discrepancy caused by faulty memory. Even a misremembered detail from four or five years ago. Even a number you genuinely believed was correct but wasnt according to records you never saw.

They are not your friends. They are not neutral factfinders. They are not trying to help you explain yourself. They are federal law enforcement officers building a criminal case, and everything you say can and definitely will be used against you.

What The Government Already Knows About You

97.4%.

Thats not a typo or an exaggeration for effect. Thats the actual conviction rate in prosecuted COVID fraud cases according to official IRS Criminal Investigation data. When the federal government decides to bring charges against you, they almost never lose at trial. Of the 2,532 defendants found guilty as of December 2024, only 117 exercised there constitutional right to trial. The remaining 2,415 pleaded guilty becuase they understood what they were facing.

Let that statistic sink in for a moment before you decide to talk to anyone.

The DOJ COVID-19 Fraud Strike Force uses advanced data analytics and artificial intelligence to identify investigation targets. They cross-reference PPP loan data with state unemployment records that show who was actually employed. They compare applications to IRS filings that show actual income and payroll. They examine bank records that show were money actually went. Algorithms and data matching in 2025 are systematically catching discrepancies that seemed perfectly hidden in the chaos of 2020.

And they have plenty of time. That's the part that should absolutely keep you up at night.

In August 2022, President Biden signed two separate laws that fundamentally changed the landscape for PPP and EIDL fraud prosecution. The PPP and Bank Fraud Enforcement Harmonization Act extended the statute of limitations to a full 10 years. That means if you received a PPP loan in 2020, federal prosecutors have untill 2030 to bring criminal charges against you.

They have until 2030 to charge you for a 2020 loan. Let that timeline sink in.

The $64 billion in potentially fraudulent PPP loans represents approximately 8% of the total $800 billion distributed through the Paycheck Protection Program. When combined with EIDL fraud, estimates exceed $200 billion in pandemic relief program fraud overall. The SBA Office of Inspector General flagged 669,000 potentialy fraudulent loans through automated screening systems. Thats alot of potential targets for investigation. And enforcement activity shows no signs of slowing down.

Sentencing patterns have shifted dramatically in ways that should concern you. Defendants sentenced in 2024-2025 are receiving federal prison terms that average 40% longer then defendants sentenced in 2021-2022 for the exact same conduct. Early pandemic leniency has completely evaporated. The message from federal judges is clear.

Here's the kicker about timing that most people don't consider. The government has no reason to rush. They can wait years, building there case carefully, letting you accumulate assets and build a life worth protecting. Then they approach you when the stakes are highest and there leverage is maximized.

The Defenses That Actually Work And The Ones That Dont

I didn't know, it's probably what you're thinking as a potential defense. You didnt know the application was filled out wrong. You didnt know you were supposed to calculate payroll that specific way. You didnt know the eligibility rules applied to your situation.

Heres the problem with that defense as it actually plays out in court. Willfulness under 18 USC 1001 dosent require that you knew you were specifically violating a particular federal statute. It simply requires that you knew your statement was factually false at the time you made it. If you knew the numbers wernt accurate when you signed that application, you acted willfully under the law regardless of wheather you understood the legal consequences. Ignorance of the law is simply not a defense.

OK so what about challenging materiality as a defense? Materiality sounds promising until you understand how courts actually interpret it. Materiality dosent mean the government has to prove they actually relied on your statement in making any decision. It only means your statement could have influenced there decision making process. The controlling test from Kungys v United States asks whether the statement had a "natural tendency to influence or was capable of influencing the decision of the decision-making body." If your false statement could have affected wheather you got the loan, it was material as a matter of law.

The literal truth defense only works if your statement was actually and precisely literally true as stated. If you said "I had ten employees in February" and you actually had eight employees, but you meant ten including contractors who arnt technically employees, thats not literally true. Thats a false statement followed by an explanation. Federal courts consistently refuse to accept explanations after the fact.

Heres the defense that actually matters and can make a real differance in your case. Lack of knowledge that the statement was false at the time you made it. If you genuinely believed your statement was true when you made it, and you had a resonable documented basis for that belief, thats a real defense that can work. But building that defense requires documentation from the time period, witnesses who can testify to your state of mind, and expert testimony about what you knew and when.

The ambiguity defense can sometimes work. If the agent's question was genuinely unclear, and your answer was reasonable given how you understood the question, that's a potential defense. But this requires showing the question was objectively ambiguous, not just that you chose to interpret it conveniently.

What Smart Defendants Do Before The Interview

Dont talk to them. Full stop.

Thats the first and most important rule you need to internalize right now. If federal agents show up at your door or your business or your workplace, you have absolutely no legal obligation whatsoever to speak with them about anything. You can politely but firmly decline the invitation to talk. You can say your not comfortable answering any questions without having an attorney present. You can simply close the door after telling them to contact your lawyer.

Silence isnt obstruction of justice. Requesting to speak with counsel first isnt evidence of guilt. The Fifth Amendment exists precisely so American citizens can decline to answer questions that might potentially incriminate them. This is not just a right for guilty people. Its a right for everyone, including the completely innocent.

The best interview from your perspective is the interview that never actually happens at all.

But heres were the nuance comes in that smart defendants understand. We recognize the counter-argument here and we want to address it honestly. Cooperation through counsel often does lead to significantly better outcomes in federal cases. Defendants who proactively work with investigators through their attorneys sometimes receive substantially reduced sentences, pre-indictment resolutions that avoid charges entirely, and even cases being completely declined for prosecution.

Thats true. Its an important truth. But notice those two critical words in that sentence. Through counsel.

Cooperation absolutly dosent mean talking to federal agents without any protection. Cooperation properly done means having an experienced federal defense attorney who can structure the information sharing strategically, control the narrative being presented to the government, review all documents carefully before there ever turned over, and ensure your making thoughtful strategic decisions rather then panicked emotional ones.

At Spodek Law Group, weve seen both outcomes play out in real cases with real clients. Clients who talked to agents before calling us created significant new problems that we then had to work extremely hard to solve. Clients who called us first before saying anything had options available to them that those other clients permanently lost.

The loan broker or consultant who told you exactly how to fill out your application has every possible incentive to let you personally take the fall for whatever went wrong. Prosecutors very rarely go after the advisors who helped create these applications. Your the one who actually signed on the line. Your the one with the direct exposure. Your the one who needs representation.

Why You Need A Federal Defense Attorney Now

The clock is definitely running whether you acknowledge it or not.

Every single day you spend without proper legal representation is another day to make a potentially catastrophic mistake. Another opportunity for federal agents to contact you or your family members. Another chance to inadvertently say somthing that becomes damaging evidence against you. Another moment were a decision you make without the guidence of experienced counsel creates irreversable consequences you simply cant undo later.

The federal investigation isnt waiting patiently for you to feel ready to deal with it. It's progressing methodically behind the scenes, whether you're mentally prepared to confront it or not.

Look, I get it completely. Lawyers are genuinely expensive. Federal criminal defense especially requires specialized expertise that commands premium rates. You might be desperatly hoping this whole situation just blows over on its own. You might be telling yourself the loan amount was relatively small and the government surely has bigger fish to fry. You might be convincing yourself that since years have already passed without anything happening, maybe nothing will.

But remember what we explained about that 10-year extended statute of limitations. The federal government isnt in any hurry here. There not going to contact you until there completly ready with a fully built case. And by the time they're finally ready to approach you, they've already spent months or years building every aspect of their case against you.

Todd Spodek and the experienced team at Spodek Law Group have represented clients facing every conceivable kind of federal fraud allegation. PPP fraud cases. EIDL fraud investigations. Wire fraud charges. Bank fraud prosecutions. And yes, 18 USC 1001 false statements charges that arise from interviews and investigations. We understand intimately how these cases are built and we understand how to challenge them.

You desperatly need someone who genuinely knows how federal court operates from the inside. Someone who has real relationships with federal prosecutors and understands how charging decisions get made. Someone who can potentially intervene before formal charges are ever filed if thats still possible, and who will fight aggressively for you if charges cant be prevented.

The phone number to reach us is 212-300-5196. The initial call is completly confidential and protected. Attorney-client privilege attaches and applies from the very first conversation we have together.

Dont let the next knock at your door catch you completly unprepared and vulnerable. Dont let what seems like a casual conversation with friendly agents become a federal felony conviction that destroys your life. Dont become another statistic in that devastating 97.4% conviction rate because you waited too long and hoped for the best instead of getting real help.

The loan application you signed years ago might definitely be a serious problem. But the investigator interview you havent had yet? That's where the most immediate and avoidable danger actually lives. And that's precisely where the right attorney can make all the difference between a manageable outcome and a complete disaster.