Los Angeles PPP Loan Fraud Lawyers

You think LA is too big. Ten million people in the metro area. Hundreds of thousands of businesses. The federal government can't possibly track everything in a city this size. They're overwhelmed. They're understaffed. They'll focus on the obvious cases and everyone else will slip through.

You have it backwards.

Welcome to Spodek Law Group. Our goal is to tell you what nobody else will: Los Angeles is one of only THREE cities in America with a dedicated COVID-19 Fraud Strike Force team. When the Department of Justice decided where to concentrate PPP prosecution resources, they picked Miami, New Jersey, and LA. That's it. Three cities out of the entire country. If you committed PPP fraud anywhere in Southern California, you're in the crosshairs of one of the most concentrated prosecution efforts in federal history.

And heres the part that's uniquely LA. The culture that rewards visible success - the Ferraris, the designer clothes, the oceanfront apartments - that culture became the prosecution's best friend. Mustafa Qadiri used $5 million in fraudulent PPP loans to buy a Ferrari 458 Italia, a Lamborghini Aventador S, and a Bentley Continental GT. All three cars were seized. The performance of success became the evidence of guilt. In LA, showing off isn't just tacky. Its a confession.

LA Has a Dedicated PPP Prosecution Team

Most people assume bigger cities mean more chaos, more cases falling through cracks, more opportunities to disappear. That assumption is completely wrong when it comes to federal PPP prosecution in Los Angeles.

The Central District of California - which covers LA County, Orange County, Ventura, San Bernardino, Riverside, Santa Barbara, and San Luis Obispo - is the largest federal district in the country by population. When the DOJ created the COVID-19 Fraud Strike Force, they had to decide where to put dedicated resources. LA made the cut. Miami made the cut. New Jersey made the cut. Thats the complete list.

OK so what does "Strike Force" actualy mean for your case? It means dedicated prosecutors. Not Assistant US Attorneys juggling PPP cases between drug trafficking and immigration fraud. Prosecutors whose entire job is pandemic fraud. Every morning they wake up thinking about PPP cases. Every afternoon they're building evidence packages. Every week they're coordinating with FBI, IRS Criminal Investigation, Homeland Security Investigations, and the SBA Office of Inspector General. All of those agencies share data with each other. Your name shows up on one database, it shows up on all of them.

You might think being in the largest federal district would mean cases get lost. The Strike Force exists precisley BECAUSE of the volume. They created concentrated resources to match concentrated fraud. The investigation happening right now - the one you don't know about - becomes the indictment in 2026, 2027, 2028. The 10-year statute of limitations means they have until 2030, 2031, or 2032 depending on when you applied for forgiveness. Theres no rush. Theyre being systematic. And systematic is worse than random.

Heres something practitioners understand that the public dosent. Strike Force prosecutors have career incentives. They're building resumes. Every conviction goes on their record. Every case they close justifies the Strike Force budget. You're not being prosecuted becuase you're important - you're being prosecuted becuase you're there. And in LA, "there" means within the most concentrated PPP prosecution apparatus in the western United States.

The 10-year statute of limitations created by the PPP and Bank Fraud Enforcement Harmonization Act of 2022 means these prosecutors have time to be thorough. Traditional fraud has a 5-year clock. PPP fraud has 10 years. If you applied in April 2020, your exposed until April 2030. If you applied for forgiveness in 2022 - and many people did - the clock starts from forgiveness. That means exposure until 2032. A full decade of looking over your shoulder while Strike Force prosecutors systematicaly work through cases. They're not rushing. They're being methodical. And methodical with a 10-year runway is how you prosecute thousands of people instead of hundreds.

The Flashiest Fraud in America Happened Here

LA culture rewards visible success. Everyone knows that. What nobody told you is that visible success became the evidence trail that convicts people.

Mustafa Qadiri lived in Irvine. He submitted fraudulent PPP applications claiming to run four Newport Beach companies: All American Lending, All American Capital Holdings, RadMediaLab, and Ad Blot. None of them actualy existed. He fabricated IRS documents. He created fake bank records. He even used someone else's name, Social Security number, and signature on one application - thats aggravated identity theft, a separate federal charge that adds mandatory prison time.

He got $5 million. Then he went shopping.

A 2011 Ferrari 458 Italia. A 2018 Lamborghini Aventador S. A Bentley Continental GT. Three cars that cost six figures each. Plus $2 million sitting in his bank accounts.

When federal agents arrested him, they seized all three cars. They froze the $2 million. Everything he bought to show his success became Exhibit A, B, C, and D. The charges: four counts of bank fraud, four counts of wire fraud, aggravated identity theft, six counts of money laundering. Fifteen separate federal charges becuase he couldnt resist showing off.

Its not just Qadiri. Robert Benlevi used PPP money to rent an oceanfront apartment in Santa Monica. Visible. Traceable. Evidence. Casie Hynes submitted 80+ fraudulent applications for about 20 different companies - and the prosecutors traced every single one. The digital trail exists wheather you remember creating it or not.

Heres the insight that should terrify anyone whos spent PPP money on anything visible. LA encourages this behavior. The culture tells you to display wealth. To drive the nice car. To live in the nice apartment. To show your success publicly. That cultural norm became the noose. Prosecutors don't have to hunt for evidence in LA - defendants advertise it. Your Instagram posts are discovery requests waiting to happen.

135 Months: The Sentence That Sets the Ceiling

You might think PPP fraud means 2-3 years if you get caught. A slap on the wrist. First-time offender, made a mistake during COVID chaos, judge will understand.

Robert Benlevi got 135 months. Thats 11 years and 3 months in federal prison.

He lived in Encino. He submitted 27 fraudulent PPP applications to four different banks between April and June 2020. He owned eight companies and claimed each one had 100 employees with average monthly payroll of $400,000. Fabricated IRS documents showed annual payroll of $4.8 million per company.

The reality? None of the companies had any employees. None had any payroll. He claimed 800 fake people existed. Eight hundred.

Heres the part most people don't understand about federal sentencing. Benlevi only actualy recieved about $3 million of the $27 million he sought. Most banks rejected his applications. But it didnt matter. Under federal sentencing guidelines, attempted fraud counts - not just what you successfully stole. The $27 million he TRIED to steal drove his guideline calculation. The sentence reflects what you intended, not just what you got.

His defense attorneys tried everything. They argued mental health issues - schizoaffective disorder, post-traumatic stress disorder. They said there was low probability he'd break the law again. They pointed out hes essentially unknown, so making an example of him wouldnt deter anyone. They asked for 77 months maximum.

The judge gave him 135. Near the maximum. Mental health arguments didn't work. Low recidivism risk didn't work. Obscurity didn't work. When you claim 800 fake employees, judges don't feel sympathetic. Your excuse - whatever it is - probably wont generate more sympathy than schizoaffective disorder. And that got him 11 years.

One specific detail from the case should haunt anyone thinking about PPP exposure. In a single day, Benlevi withdrew $248,000 in cashier's checks from one of the PPP-funded accounts. That withdrawal pattern - large amounts, fast, converted to instruments that are harder to trace - proved consciousness of guilt. He knew he was stealing and tried to move the money quickly. The prosecutors used that single day's transactions to demonstrate fraudulent intent. Every financial decision you made with PPP money is evidence of your state of mind.

And heres something that surprises most people about federal sentencing in the Central District. First-time offender status means less than you think. The federal sentencing guidelines for fraud are driven primarily by loss amount, not by your personal history. If you fraudulently obtained $500,000, thats a base offense level that puts you at 5-7 years before any adjustments. Add enhancements for sophistication, for using a financial institution, for number of victims, for obstruction if you deleted evidence - sentences climb rapidly. Benlevi was arguably a first-time offender too. That got him no mercy. The hope that being a first-time offender will save you from prison is not grounded in how LA federal courts actualy operate.

Professionals Are Getting Caught Too

Maybe you used a professional. An accountant. An attorney. A "PPP specialist" who promised fast approval. You figured that protects you - you relied on expert advice, you didn't know the details, you just signed where they told you to sign.

That professional is now either a target or a witness against you. Possibly both.

Yosef Y. Manela is a Los Angeles businessman who owns an accounting firm, a law firm, AND a consulting company. Triple professional licenses. He should have known better than anyone what the PPP rules required. He got six PPP loans using duplicative payroll expenses and non-existent employees.

In September 2024, he paid $802,341 to settle False Claims Act allegations with the federal government. Thats civil liability - he may still face criminal exposure. But heres the part that affects YOU. If you were one of his clients, and he helped you with your PPP application, prosecutors now have detailed records of exactly what he did for everyone. His files are their evidence.

It gets worse. Artur Chanchikyan owned Gentle Touch Home Health Care Inc. in North Hollywood. In December 2019 - before COVID even started - the Centers for Medicare and Medicaid Services placed him under payment suspension for fraud allegations. He was already being investigated for healthcare fraud.

Then COVID hit. Around April 2020, while still under investigation for federal healthcare fraud, he applied for $160,000 in PPP loans. He added PPP fraud to his existing federal fraud exposure. Now he faces charges from both directions. The desperation that drove him to apply while already under investigation is exacty the desperation prosecutors exploit.

Heres why professional involvement makes your situation worse, not better. Training means you should have known it was wrong. Education is an aggravating factor under federal sentencing guidelines, not a mitigating one. If you used a CPA to prepare your application and that application contained false statements, the government will argue you had expert help making your lies look professional. You didn't hide behind a professional - you weaponized one.

And that professional helped other people too. Maybe 5 clients. Maybe 20. Maybe 80 like Casie Hynes. If ONE of those other clients gets charged and cooperates, your name comes up. "Who else did you help?" Thats the first question prosecutors ask. Your accountant isnt your protection - theyre your exposure.

What Central District Sentences Actually Look Like

Let me show you whats actualy happening in federal court right now. Not hypotheticals. Not guidelines. Real sentences from real cases.

Casie Hynes - Los Angeles. Submitted 80+ fraudulent PPP and EIDL applications for approximately 20 companies. Caused $3.2 million in losses, recieved about $2.25 million. Also committed tax fraud seeking $1.3 million in false pandemic credits. Sentence: 60 months. Five years in federal prison. February 2025.

Robert Benlevi - Encino. Attempted $27 million in fraud, actualy recieved $3 million. 800 fake employees. Sentence: 135 months. 11+ years. One of the longest PPP sentences in the country.

Hassan Kanyike - Santa Clarita. $1.8 million in combined EIDL and PPP fraud. Pleaded guilty to wire fraud. Required to pay $1.3 million in restitution - that restitution survives bankruptcy. It follows him forever.

Inland Empire Women - $3.5 million scheme. Recruited over 100 co-schemers - family members, associates, strangers they convinced to apply. Indicted October 2024. Cases still working through the system.

Heres the pattern that should concern you. Defendants sentenced in 2024 and 2025 are recieving sentences 40% longer than defendants sentenced in 2021 and 2022 for identical conduct. Same fraud amount. Same circumstances. Different year. Harsher sentence. The window for judicial sympathy slammed shut when judges saw how defendants actualy spent the money.

The Ferraris and Lamborghinis killed everyones chances at lenency. Judges watched defendant after defendant claim COVID desperation while the evidence showed luxury purchases. The "COVID made me do it" defense stopped working the moment the spending patterns came out. By 2024, no judge in the Central District believed anyone needed a $200,000 car to survive the pandemic.

Even the "small" consequences aren't small. Restitution in federal cases survives bankruptcy. Hassan Kanyike owes $1.3 million that he can't discharge. He'll be paying it back for the rest of his life. Wages garnished. Assets subject to seizure. Tax refunds intercepted. You serve your sentence AND still owe everything when you walk out. The conviction follows you forever - try getting a job, maintaining a professional license, getting a mortgage with federal fraud on your record.

Theres another pattern emerging from Central District cases that practitioners recognize. Multiple applications get you in more trouble than single ones. Casie Hynes didn't submit one fraudulent application - she submitted 80+. The volume demonstrated this wasn't confusion or mistake. It was systematic. Prosecutors use application count as evidence of intent. If you filed multiple PPP applications for different entities, each one is a separate count of bank fraud or wire fraud. Each application is a separate lie. Each lie carries its own potential sentence. The charges stack.

Why Acting Now Matters More in LA

The worst thing you can do is wait. Every day you wait, someone in your network moves closer to cooperating against you.

Remember the Inland Empire case? 100+ co-schemers charged. How did prosecutors find 100+ people? One person flipped. Gave up everyone they recruited. Family members, associates, strangers - all exposed becuase one person decided their freedom mattered more than everyone's secrets.

The person who helped you with your PPP application probably helped other people too. If ONE of those other clients gets charged and decides to cooperate, prosecutors ask them who else they helped. Your name comes up. Suddenly your connected to people youve never met, all through one shared preparer who has every incentive to give up names.

Cooperation credit works like a first-mover advantage. The first person to cooperate gets the best deal. The second person's cooperation is worth less. By the fifth or sixth cooperator, prosecutors already have most of what they need - your information isn't worth much anymore. The window shrinks daily.

Think about what this means in practical terms. Pre-indictment cooperation - coming forward before your charged - can affect your bail conditions, your plea offer, AND your sentencing. Three separate leverage points that all get weaker with time. In the Central District, the difference between pre-indictment cooperation and post-indictment damage control can be 30 months or more. Thats two and a half years of your life that depend on when you pick up the phone.

At Spodek Law Group, Todd Spodek has handled hundreds of federal fraud cases. The clients who call before the subpoena have options. Voluntary disclosure. Cooperation agreements. Structured restitution. The clients who call after the subpoena arrives are fighting for survival - limiting damage instead of preventing it.

Strike Force coordination makes this worse in LA. FBI, IRS Criminal Investigation, Homeland Security Investigations, SBA Office of Inspector General - all of them sharing information. Your name shows up in one investigation, it appears in databases across multiple agencies. The walls close from multiple directions simultaniously.

Call 212-300-5196 before someone else in your network does. Not becuase we're trying to scare you into hiring a lawyer. Becuase in LA, with dedicated Strike Force resources hunting PPP fraud systematicaly, waiting is the most dangerous choice you can make.

Spodek Law Group. The Woolworth Building, 233 Broadway Suite 710, New York. We put this information on our website becuase most people have no idea how exposed they realy are in Southern California. Our goal isnt to frighten you. Its to make sure you understand that LA's size dosent protect you - LA's Strike Force targeting specificaly threatens you. The luxury purchases that LA culture encouraged became the evidence trail that LA prosecutors use.

In Los Angeles, the performance of success became the proof of fraud.