Hartford EIDL Loan Fraud Lawyers

Hartford EIDL Loan Fraud Lawyers

FBI New Haven or SBA Office of Inspector General agents contacted you about your Economic Injury Disaster Loan application. The investigation targets revenue figures that don’t match your Hartford business tax returns, employee counts you can’t verify with payroll records, economic injury claims that seem inflated for your actual operations. You’re in Hartford, Connecticut’s capital city, prosecuted in District of Connecticut federal court. Agents appeared with questions about 2019 gross revenue calculations, whether your business employed the workers you listed, whether pandemic impact justified the loan amount you received. 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 throughout District of Connecticut including Hartford prosecutions.

The $10K Advance Trap

Your Hartford business applied for EIDL during pandemic emergency in 2020, SBA streamlined applications, processed loans within days instead of weeks, you calculated 2019 gross revenue based on what seemed reasonable – bank deposits, revenue estimates, projections from partial-year operations, the application asked for employee count, you listed workers who helped during busy periods, contractors who performed essential functions, family members involved in operations, SBA approved your loan within days including $10,000 advance payment SBA called a “grant” in program documentation, SBA materials described the $10,000 as “non-repayable” regardless of loan outcome, you believed the advance functioned separately from the loan itself – emergency cash that carried no fraud liability even if loan application contained errors, Hartford business owners throughout Connecticut operated under this assumption, the “grant” language seemed definitive, if SBA forgave or you repaid the main loan the $10,000 stayed separate, this assumption creates federal criminal exposure because if your EIDL application contained false statements when submitted – revenue inflated beyond what tax documentation supports, employees fabricated or exaggerated, economic injury claims inconsistent with business operations – those false statements constitute wire fraud under 18 USC Section 1343 and false statements to SBA under 18 USC Section 1014, the total amount you received including the $10,000 advance equals your fraud loss for federal sentencing purposes, District of Connecticut prosecutors count the “grant” toward Guidelines calculations, the language SBA used in program materials doesn’t protect you from criminal prosecution if the underlying application contained knowing false statements.

Hartford business owners confront this question: when do revenue estimates made during pandemic emergency cross into federal crimes?

Your 2019 tax return documented $180,000 revenue. Your EIDL application claimed $400,000 annual gross revenue. You calculated based on projections before pandemic disrupted operations, estimates of what the business would have generated without government shutdown orders, revenue figures that seemed defensible under extraordinary circumstances. Federal prosecutors examine the gap between tax documentation and application figures. That $220,000 difference becomes evidence of intentional fraud if prosecutors can demonstrate you knew the revenue claims exceeded what business records could support.

How FBI Investigations Work

FBI New Haven agent contacts your Hartford business. “We need to verify some information about your EIDL application.” The phrasing sounds administrative – routine follow-up, documentation review, nothing suggesting criminal investigation. Hartford business owners respond without defense counsel present. You explain your revenue calculations, how you arrived at employee counts, why you believed the business qualified for the loan amount you received. The agent takes notes, asks clarifying questions, seems focused on understanding your application process.

Investigators already possess your complete financial documentation through grand jury subpoenas issued months before contacting you. They obtained tax returns via IRS administrative summons – Schedule C for sole proprietors, corporate returns for entities. They pulled your original EIDL application from SBA’s database. They examined bank records to verify deposit patterns, business operations, expense documentation. They reviewed quarterly payroll tax filings with IRS, or noted the absence of such filings if you claimed employees but never submitted 941 forms.

They know the discrepancies before the interview begins.

The interview seeks admissions proving criminal intent. Statements where you acknowledge understanding EIDL eligibility requirements but inflating figures to qualify for larger loan amounts. Acknowledgment that revenue estimates exceeded what tax returns documented. Admission that employee counts included workers not on formal payroll or contractors you characterized as employees. These admissions transform application errors into federal crimes by demonstrating you knew the statements were false when submitted.

District of Connecticut prosecutors must prove criminal intent – not just that your application contained errors, but that you knowingly made false statements to obtain EIDL funds. The constitutional burden requires proof beyond reasonable doubt that you intended to defraud SBA when you submitted revenue figures, employee counts, economic injury claims. That burden creates defense opportunities, but once investigators obtain admissions during unguarded interviews, the prosecution case strengthens considerably.

You received $150,000 EIDL loan plus the $10,000 advance, total $160,000. Your application listed $400,000 annual revenue and 8 employees. Tax returns documented $180,000 revenue and quarterly payroll filings show 2 workers. Federal sentencing in District of Connecticut operates through mandatory Guidelines based on fraud loss amount. Loss equals the total you received through false statements – the full $160,000 including the advance. That places you at the boundary between small fraud ($20,000-$150,000 typically producing probation to 18 months for first-time offenders) and medium fraud ($150,000-$550,000 producing 18-36 month sentences). Three factors control placement within Guidelines ranges: fraud loss weighs heaviest, criminal history matters second, acceptance of responsibility counts third. Department of Justice data from December 2024 shows 81% of pandemic fraud defendants received prison time according to official statistics.

Call 212-300-5196.