Long Island PPP Loan Fraud Lawyers
You read something online about PPP fraud prosecutions. Maybe you saw a news story. Maybe a friend mentioned it. Now you can't sleep. Your mind keeps running the same calculation: what if they come for me?
Let me tell you what's actually happening. Not the headline version that's designed to terrify you. The real version, with context.
Yes, the federal government is prosecuting PPP fraud. Yes, some people in Long Island have gone to federal prison. But the situation is more nuanced than the fear-inducing articles suggest. Most people who are worried will never face criminal charges. Understanding why - and understanding where you actually stand - is more useful than another sleepless night.
Welcome to Spodek Law Group. We're going to explain what's happening with PPP fraud enforcement in the Eastern District of New York, and help you understand whether you actualy need to be concerned. This isn't about scaring you into calling. Its about giving you information so you can make a rational assessment.
How PPP Fraud Enforcement Actually Works
The government didnt investigate PPP applications the way you might imagine. They didnt have agents reviewing files one by one. They built automated systems.
Every PPP application went into a database. That database connected to IRS records. The system compared what you claimed as payroll against what you're 941 filings showed. It compared against W-2 totals. Against Schedule C revenue. When the numbers didnt align, the system flagged the application.
This happened automaticaly. It happened in 2020 and 2021. It happened without any human reviewing you're specific file.
The SBA refered over 669,000 potentialy fraudulent loans to the Office of Inspector General for investigation. Thats out of roughly 13.4 million total PPP recipients. About 28% were flagged for some kind of discrepency.
Congress extended the statute of limitations from five years to ten years in August 2022. This means every 2020 PPP loan is technicaly prosecutable until 2030. Every 2021 loan until 2031.
Thats the system. Thats how it works. Thats the context.
Putting the Numbers in Perspective
Heres what the scary articles dont tell you: being flagged is not the same as being prosecuted.
Of those 669,000 flagged loans, how many have resulted in criminal charges? A fraction. Federal prosecutors have limited resources. They prioritize cases based on dollar amounts, the egregiousness of the fraud, and wether assets are recoverable.
The cases that make the news - Niall Alli with his $1.7 million fraud and Patek Philippe watches, Leon Miles with his Bentley Continental, Damaris Beltre with her $12 million scheme - these are not typical. These are the cases prosecutors choose becuase their significant, becuase the evidence is overwhelming, becuase they make good deterent examples.
If you submitted one application with some questionable numbers, your in a diffrent category than someone who submitted 27 applications like Donna Ingram alegedly did.
The 98.5% conviction rate that gets cited? Thats for cases the government chooses to prosecute. It dosent mean 98.5% of flagged loans result in conviction. It means that once federal prosecutors decide to bring charges, they almost always win - becuase they only bring cases their confident theyll win.
Most flagged applications will result in civil action at most. Repayment demands. Loan forgivness denials. Administrative penaltys. Unpleasent, but not prison.
Not everyone flagged becomes a defendant.
What Actually Affects You're Situation
Several factors determine wether a flagged loan becomes a criminal prosecution.
Loan size matters. A $20,000 loan with inflated payroll numbers is treated differntly than a $2 million scheme. Prosecutors have to justify the resources spent on each case. Smaller loans typicaly dont justify the full weight of federal prosecution.
The nature of the discrepency matters. Misunderstanding what counted as payroll is diffrent from fabricating employees who dont exist. Honest confusion about the rules is diffrent from creating fake businesses to apply multiple times.
Documentation matters. If you can show you had a resonable basis for you're numbers - even if they turned out to be wrong - thats diffrent from having no basis at all.
You're response to scrutiny matters. If agents contact you and you cooperate through counsel, thats diffrent from lying to federal agents (which is its own crime).
Prior criminal history matters. First-time offenders in white-collar cases are treated differntly than people with records.
Todd Spodek has seen both sides of these cases. Some clients come in terrified and discover their not in the category prosecutors care about. Others come in assuming it will blow over and discover they need imediate intervention.
These factors matter. You're situation is specific.
This is alot to process.
Understanding You're Actual Options
If your genuinely concerned about you're PPP loan, you have several options.
Option one: Wait and see. If you're loan was relativly small and you're discrepency was marginal, this might be rational. The government has limited resources and a large backlog. Not every flagged loan will recieve attention. The risk: if they do come, youve lost the oportunity for proactive engagement.
Option two: Consult with counsel now. A federal defense attorney can review you're situation objectivly. What did you actualy claim? What do you're records show? How significant is the gap? This gives you information without comitting to any particular course of action. It lets you make decisions based on reality rather then fear.
Option three: Proactive engagement. In some cases, approaching the government before they approach you can result in civil resolution rather then criminal prosecution. This requires carefull strategic judgement about timing and approach. Its not right for everyone, but for some people it converts a potential criminal matter into a managable civil penalty.
Option four: Prepare for contact. If you beleive agents may contact you, having counsel identified in advance means you dont make panic decisions when they show up. You know exactly what to say: "I'd like to speak with my attorney before answering questions."
Each option has trade-offs. The right choice depends on you're specific facts.
When Your Ready
If you want to understand were you actualy stand, Spodek Law Group can help you assess you're situation. Weve handled federal fraud cases in the Eastern District of New York. We understand how these investigations work, what prosecutors prioritize, and what factors affect outcomes.
The consultation is free. Theirs no obligation. No pressure.
Some people who call us discover they have nothing to worry about. Others discover they need to take action. Either way, youll have information instead of anxiety.
When your ready, call us at 212-300-5196. Or dont. But dont spend another night catastrophizing about worst-case scenarios that may not apply to you're situation. Get information. Make rational decisions.
Were here when you need us.
