Little Rock EIDL Loan Fraud Lawyers

Little Rock EIDL Loan Fraud Lawyers

You got contacted about your EIDL loan. Not your PPP loan – your Economic Injury Disaster Loan, the one you applied for in 2020 or 2021 when your Little Rock business faced pandemic shutdowns. FBI Little Rock Field Office, IRS Criminal Investigation, or SBA Office of Inspector General wants to “verify” information on your application. You’re in Little Rock, which means the Eastern District of Arkansas US Attorney’s Office prosecutes your case at the Richard Sheppard Arnold United States Courthouse. 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 and PPP cases across federal districts.

Here’s what EIDL fraud actually means, what happens when Little Rock prosecutors investigate your loan, and what prison time you’re facing based on your specific loan amount.

What EIDL Fraud Means

Most Little Rock business owners understand PPP fraud – false payroll claims, revenue inflation, money spent on prohibited expenses. EIDL fraud confuses them because the Economic Injury Disaster Loan operated differently. You applied directly to the SBA, not through a commercial bank. You received up to $500,000 loan based on revenue calculations, not payroll like PPP. You got a $10,000 advance that SBA explicitly called a “grant” – money you didn’t have to repay even if your loan application was denied. That grant language created confusion that federal prosecutors now exploit when building wire fraud cases. When the SBA Office of Inspector General investigates EIDL fraud, they’re looking at the same conduct: false revenue figures on your application, inflated number of employees, fake businesses that never operated. The charges are identical – wire fraud under 18 USC Section 1343, false statements to SBA under 18 USC Section 1014. Federal sentencing Guidelines treat EIDL and PPP fraud identically based on loss amount. Here’s the trap most Little Rock defendants fall into, and it’s devastatingly common. They received the $10,000 EIDL advance – SBA documentation specifically called it a grant, explicitly said they didn’t need to repay it, positioned it as emergency relief separate from the loan approval process. So when FBI Little Rock Field Office contacts them three years later about discrepancies in their EIDL application, they genuinely think “but I only got the $10,000 grant, not the full loan, and grants don’t need to be repaid, so how is there fraud?” That’s wrong. If your EIDL application contained false information – revenue you claimed didn’t match your tax returns, employees you listed didn’t exist – the $10,000 advance counts toward loss calculation for sentencing purposes. Federal prosecutors don’t care that SBA called it a grant. What matters is that you obtained $10,000 from the federal government based on false statements. That’s wire fraud. Little Rock restaurant owner claims $300,000 annual revenue on EIDL application when actual revenue per tax returns shows $120,000. Receives $150,000 loan plus $10,000 advance. Three years later, FBI investigates. That’s $160,000 loss amount under Guidelines, which puts defendant in 24-30 month sentencing range. Multiple applications create compounding problems. Some Little Rock business owners submitted EIDL applications for several businesses. Each application had inflated revenue or fake payroll information. FBI adds up the aggregate loss across all fraudulent applications. Four EIDL loans totaling $400,000 obtained through false statements means $400,000 loss calculation, which produces 36-48 month sentencing exposure.

That Call

SBA Office of Inspector General or FBI contacts you. Sounds administrative. It’s federal criminal investigation.

When Little Rock business owners respond without counsel, investigators already possess their complete financial history. They know the discrepancies. What they need is your explanation – because your explanation establishes intent. You say you “estimated” revenue. That becomes evidence you knew actual revenue was lower. Every explanation provides prosecutors with statements proving criminal intent.

Prison Time

Wire fraud carries 20 years maximum. False statements to SBA under 18 USC 1014 carry 30 years maximum. Those theoretical maximums are meaningless. Federal sentencing operates through mandatory Guidelines based on loss amount. Small EIDL fraud – $10,000 to $50,000 – typically produces probation to 18 months imprisonment for first-time offenders. That $10,000 EIDL advance by itself, if obtained fraudulently, puts you in this bracket. Medium EIDL fraud – $50,000 to $250,000 – results in 18 to 36 month sentences, the most common range for Little Rock cases. Large EIDL fraud – $250,000 to $1 million – produces 36 to 92 month sentences. Very large schemes exceed 10 years. Tyler Andrews from Russellville received 196 months in December 2024 for facilitating $13.4 million in fraudulent EIDL applications.

Three factors determine where you land. Loss amount matters most. Every dollar counts because Guidelines operate on specific brackets. Criminal history matters second. First-time offenders fall into Criminal History Category I, lower end of ranges. Acceptance of responsibility matters third. Federal Guidelines provide 2-3 level reduction if you plead guilty and accept responsibility. That translates to 6-12 months less prison in typical EIDL cases, which explains why 97% of federal fraud prosecutions resolve through plea agreements. But the sentencing climate changed dramatically between 2021 and 2025. Early EIDL fraud defendants benefited from judicial sympathy. That sympathy evaporated. Eastern District of Arkansas judges in 2024-2025 impose sentences approximately 40% longer than sentences for identical conduct in 2021-2022. Loss amount fights matter because they determine everything. If your EIDL application claimed $180,000 revenue but prosecutors can only prove $110,000 was fraudulently obtained, you potentially dropped an entire Guidelines bracket.

First option: respond to verification without counsel. Your statements become prosecution exhibits. Second option: retain counsel immediately. Early intervention creates leverage for pretrial diversion, declined prosecution. Third option: ignore the request. They indict you. Timeline matters. Defendants who retain counsel within 48 hours per FBI Little Rock Field Office investigation protocols have options. Pretrial diversion for first-time offenders, cooperation agreements, declined prosecution. The $10,000 EIDL advance issue compounds everything. Because SBA called it a grant, Little Rock business owners thought accuracy didn’t matter. By the time they understand that $10,000 advance counts toward loss calculation if obtained fraudulently, they’ve already provided statements prosecutors use to prove intent. Todd Spodek has defended federal fraud cases for over 40 years. We’ve handled EIDL prosecutions in Eastern District of Arkansas. Call 212-300-5196.