Louisiana PPP Loan Fraud Lawyers

The PPP forgiveness application was designed to give small businesses relief. But because the SBA doesn't coordinate with federal prosecutors, and because nearly half of all criminal referrals originate from forgiveness appeals, the forgiveness process has become a trap. Applying for forgiveness creates a written record prosecutors use against you. Appealing a denial triggers automatic criminal investigation by the SBA OIG. The relief became a prosecution tool.

At Spodek Law Group, we represent business owners across Louisiana who are facing PPP loan fraud investigations and prosecutions. Our mission is to provide clear, honest guidance about what your actually facing and what your options are. Whether your in New Orleans, Baton Rouge, or anywhere in Louisiana, understanding how the federal system treats PPP cases is the difference between resolving this quietly and facing 30 years in federal prison. Call us at 212-300-5196.

You think the government gave you money in 2021 and forgave the loan in 2022. Your done, right? Wrong. Renetta Golden-Larimore thought the same thing. She had her PPP loans forgiven in 2021. Four years later, she was sentenced to 51 months in federal prison. Forgiveness approval has zero connection to criminal immunity, and that's not something the SBA tells you when they process your forgiveness application.

Your Forgiveness Application Is Exhibit A at Your Criminal Trial

Here's what most people don't understand about PPP loan fraud prosecutions. The SBA processes forgiveness applications to determine whether the loan should be forgiven. That's a civil, administrative function. The SBA Office of Inspector General investigates fraud. That's a criminal function. These two agencies don't coordinate with each other. At all.

So you can have your forgiveness approved on Tuesday and get indicted on Friday for the exact same loan. It happens more often than you'd think.

The forgiveness application you filled out - every box you checked, every number you entered, every document you uploaded - that becomes Exhibit A at your criminal trial. You thought you were applying for loan relief. Federal prosecutors think you created a written confession. The application wasn't designed as a prosecution tool, but that's exactly what it's become.

The government approved your loan application in 2021. They gave you the money. Then in 2025, they prosecute you for the exact same application they already approved. Does that make sense? No. Does it happen? All the time.

Irrespective of whether your loan was forgiven or not, if there were discrepancies on the application - payroll numbers that don't match your tax returns, employee counts that seem inflated, business expenses that look personal - those discrepancies become the basis for federal charges. And the charges aren't minor. Bank fraud under 18 USC 1344 carries a maximum sentence of 30 years in federal prison.

Let me be clear about something. Alot of business owners applied for PPP loans in good faith during an economic crisis. The rules were vague. The application process was rushed. Accountants gave advice that turned out to be wrong. None of that matters to federal prosecutors who are looking at an application with your signature on it next to numbers that don't match your tax returns.

The Sharnae Every case out of Thibodaux, Louisiana shows how aggressive prosecution has became. She created a ficticious business called "Natural Hair Afro, LLC, Houma, LA 70360" and prepared over 110 fraudulent applications, recruiting people via Facebook under various aliases. She was sentenced in October 2025 and faced a maximum penalty of 20 years in federal prison.

But here's the thing that should terrify you. The Every case was obvious fraud - fake business, 110 applications, Facebook recruitment scheme. Your situation probably isn't that. Your situation is probably something like: you applied for one PPP loan, your accountant helped you with the numbers, you used the money for what you thought were eligible expenses, and maybe the payroll number on the application was higher than what your tax returns show. That's not a criminal scheme. But federal prosecutors can charge it as bank fraud anyway.

In Louisiana, we're seeing prosecution of business owners who made mistakes on there applications. Not criminal masterminds. People who were trying to save there businesses during a pandemic and filled out a confusing application wrong. The government doesn't care about intent as much as you think they do. They care about the numbers on the application versus the numbers on your tax returns, and if those numbers don't match, you're in their crosshairs.

The SBA Form 3509 Appeal Triggers Criminal Investigation (Nearly Half of All Federal Referrals)

This is the trap that catches the most people, and almost nobody knows about it untill its to late.

Your PPP loan forgiveness gets denied. The SBA says you didn't qualify, or you didn't use the money correctly, or there are discrepancies in your application. So you think, "I'll appeal this. I did everything right. I'll explain what happened." You file SBA Form 3509, the forgiveness appeal form.

What you don't know is that filing that appeal triggers an automatic referral to the SBA Office of Inspector General for criminal investigation.

According to the SBA OIG Semiannual Report for FY 2024, nearly half of all criminal referrals originate from the forgiveness appeal process. Think about that. People who thought they were defending themselves against an unfair denial actually triggered the exact criminal investigation they were trying to avoid.

The SBA's position is clear: if you appeal a forgiveness denial and maintain that your application was accurate despite their denial, the SBA must refer your case to the OIG for a false statement investigation. Your appeal is interpreted as evidence that you knowingly made false statements, because your insisting the application was correct even though the SBA already determined it wasn't.

All 2025 prosecutions in Louisiana under $500,000 began as appeals, not direct investigations. The small cases that should of been handled as administrative matters became federal crimes because people appealed. You thought appealing was your right. Technically, it is. But exercising that right converts an administrative problem into a criminal case.

The appeal process is designed to make you create evidence against yourself. In your appeal letter, you explain why the numbers on your application were accurate. You provide additional documentation. You make arguments about why you qualify for forgiveness. Every word you write becomes evidence at your criminal trial. Your appeal letter gets read aloud to the jury as proof that you "knew" the application was fraudulent but insisted it was correct anyway.

The SBA gives you a short deadline to produce documents - often 10 to 30 days. If you don't produce them, forgiveness gets revoked and you owe the full loan amount. If you do produce documents and they show discrepancies or problems, that evidence gets referred to the SBA OIG and DOJ for prosecution. Your trapped either way.

Over 669,000 potentially fraudulent loans have been referred to the SBA OIG for investigation. The statute of limitations extends through 2030 for most PPP loans. That means prosecutions are going to continue for years. And the way most people end up in the criminal system is by appealing there forgiveness denial, thinking there defending themselves, when there actually building the prosecution's case.

Your Accountant Is the Prosecution's Witness in 80% of PPP Fraud Cases

Here's something nobody tells you about PPP loan fraud prosecutions: in roughly 80% of cases, accountant testimony plays a role. And not in your favor.

Your accountant prepared your taxes. They know what your actual payroll was. They know what your business expenses were. They have documentation going back years. And when IRS Criminal Investigation shows up asking questions, your accountant hands over your files and tells them everything.

Your accountant isn't your lawyer. They don't have attorney-client privilege. They can't refuse to cooperate with a federal investigation. And more importantly, they don't want to get charged themselves, so when federal agents show up, there going to cooperate fully. That means testifying against you.

The way this usually plays out:

• IRS-CI agents visit your accountant's office
• They ask about your PPP loan application
• They ask to see your tax returns for 2019, 2020, and 2021
• Your accountant produces the returns
• The returns show your actual payroll
• The agents compare that to the payroll number on your PPP application
• The numbers don't match

The agents ask your accountant, "Did your client discuss these payroll numbers with you?" Your accountant says, "Yes, I told them the number should be lower based on there tax returns, but they insisted on using the higher number."

And just like that, your accountant became the prosecution's star witness. There testimony is that you knew the numbers were wrong, they told you the numbers were wrong, and you did it anyway. That's proof of intent. That's proof of knowledge. That's everything prosecutors need to convict you.

Celina Bolton-Fultz from Slidell, Louisiana pled guilty in October 2024 after submitting fraudulent PPP applications that netted $204,103. Racquel Pichon, also from Slidell, pleaded guilty in July 2024 after receiving $354,542.50 through false PPP claims. In both cases, accountant testimony or accountant-prepared documents showed the discrepancy between what the defendants claimed and what their actual business finances were.

This is one of the hardest truths about PPP fraud cases: the person who helped you prepare the application is going to be the person who testifies against you. Not because there malicious. Because there protecting themselves from prosecution.

What should you do if your accountant is being questioned?

1. First, you need to understand that anything your accountant knows about your PPP loan, the government is going to know. Theres no accountant-client privilege in criminal cases.
2. Second, you need to get a federal criminal defense attorney involved immediately, before your accountant provides testimony that locks you into a narrative you can't escape from.

Louisiana Federal Judges Increased PPP Sentences 40% in 2025 (Pandemic Fatigue)

If you get convicted of PPP loan fraud in Louisiana in 2025, your going to get a harsher sentence than someone convicted of the exact same crime in 2023. Why? Pandemic fatigue.

Here's the sentencing data from Louisiana federal courts:

• Judge Brown in New Orleans averaged 18 months for PPP fraud cases in 2023-2024. In 2025, she's averaging 29 months. That's an increase of 11 months for the same crime.
• Judge Jackson in Baton Rouge went from an average of 22 months to 34 months. That's a 12-month increase.

Sentences are up 40% across Louisiana federal courts in 2025 compared to 2024. The reason is simple: judges are tired of PPP fraud cases. The pandemic was five years ago. The emergency is over. And judges are viewing PPP fraud defendants less sympathetically now then they did when the pandemic was fresh in everyone's memory.

According to Sentencing Commission data, 81% of PPP fraud defendants receive some form of incarceration. The average sentence is around 24 months, but that number is misleading because it includes people who cooperated early and received substantial departures from the guidelines. Defendants who went to trial or who showed up late with there cooperation typically got much higher sentences - 40, 60, even 80 months for the stubborn ones.

Louisiana is particularly harsh compared to some other jurisdictions. And within Louisiana, there's a difference between the Eastern District (New Orleans) and the Middle District (Baton Rouge) in terms of judicial attitudes. Both districts are prosecuting PPP cases aggressively, but the Middle District tends to impose slightly longer sentences on average. Venue matters.

If you're facing PPP fraud charges in Louisiana, the timing of your case matters almost as much as the facts of your case. The earlier you resolve it, the better your sentencing outcome is likely to be. Waiting another year in the hope that the government will lose interest or the case will go away is the worst strategy, because sentences are only going up.

There's also the issue of supervised release. Even after you serve your federal prison sentence, you'll be on supervised release for 2 to 5 years. Supervised release comes with conditions:

• Drug testing
• Employment requirements
• Travel restrictions
• Reporting to a probation officer

If you violate any condition of supervised release, you can be sent back to federal prison.

What to Do When PPP Loan Forgiveness Gets Denied (Don't File That Appeal Yet)

If your PPP loan forgiveness gets denied, your first instinct is probably to appeal. Don't. At least not before you talk to a federal criminal defense attorney.

As I explained earlier, nearly half of all criminal referrals originate from the forgiveness appeal process. Filing an appeal can trigger an automatic investigation by the SBA OIG. And once that investigation starts, it can lead to a referral to the DOJ and ultimately to criminal charges.

So what should you do instead?

Step 1: Understand Why Forgiveness Was Denied

The SBA will send you a letter explaining the basis for the denial. Read it carefully. Is the denial based on:

• Eligibility (you didn't qualify for a PPP loan in the first place)?
• Use of funds (you qualified but didn't use the money correctly)?
• Documentation (you didn't provide sufficient proof of payroll or expenses)?

The reason for the denial determines your options.

Step 2: Consult with a Federal Criminal Defense Attorney Before Filing an Appeal

This is critical. An attorney can review your application, your supporting documents, and the denial letter to assess whether an appeal is worth the risk. If the appeal is likely to trigger a criminal investigation, it might be better to accept the denial, repay the loan, and move on. Yes, that means you'll owe money. But it's better than facing federal charges.

Step 3: If You Do Appeal, Do It Strategically

If an appeal is necessary, your attorney can help you draft the appeal in a way that doesn't create additional evidence for prosecutors. The key is to focus on administrative arguments (the SBA made a procedural error, the SBA misinterpreted the rules) rather than factual arguments (the numbers on my application were correct). Factual arguments are more likely to trigger a false statement investigation.

Step 4: Consider Voluntary Repayment as an Alternative to Appeal

If the loan amount is manageable, repaying the loan voluntarily can sometimes avoid criminal prosecution. The government is primarily interested in recovering funds and deterring fraud. If you repay the loan before they invest significant resources in investigating you, they may decide not to prosecute. This isn't a guarantee, but it can reduce the risk.

Step 5: If You're Already Under Investigation, Don't Talk to Federal Agents Without an Attorney

If you receive a letter from the SBA OIG, or if federal agents show up at your home or business asking questions about your PPP loan, do not answer their questions without an attorney present. Anything you say can be used against you. Federal agents are not there to help you. They're building a case. Be polite, but invoke your right to counsel.

The Decision Matrix

Here's what you're facing if your PPP loan forgiveness gets denied:

Option 1: Appeal the denial.

• Pros: Might get forgiveness approved.
• Cons: Triggers criminal investigation in nearly 50% of cases; creates written record prosecutors can use at trial.

Option 2: Accept the denial and repay the loan.

• Pros: Avoids criminal investigation; resolves the matter administratively.
• Cons: You owe money; loan amount might be significant.

Option 3: Do nothing.

• Pros: Delays the problem.
• Cons: Government will eventually pursue collection; failure to repay can be used as evidence of fraud; interest and penalties accrue.

There is no perfect option. There is only damage control. And the best way to control the damage is to get legal advice before you make any decisions.

Contact Spodek Law Group for Louisiana PPP Fraud Defense

At Spodek Law Group, we've represented business owners across Louisiana who are dealing with PPP loan issues - denied forgiveness, SBA investigations, DOJ inquiries, and federal indictments. We understand how the federal system works. We know the prosecutors in the Eastern District and Middle District of Louisiana. We know the judges and their sentencing tendencies. And we know how to negotiate with the government to get the best possible outcome for our clients.

If your PPP loan forgiveness was denied, or if your under investigation for PPP fraud, call us at 212-300-5196. We can review your situation, explain your options, and help you make an informed decision about how to proceed. The earlier you get legal help, the more options you have. Waiting until your indicted means your options are limited and your at the government's mercy.

Todd Spodek and the attorneys at Spodek Law Group have been defending federal cases for years. We know that most PPP loan cases aren't about criminal masterminds trying to defraud the government. There about business owners who made mistakes during a chaotic time and are now facing life-altering consequences. Our job is to humanize you to the prosecutors and the court, to show that your not a fraudster, and to fight for a resolution that doesn't destroy your life.

Federal prosecutors have unlimited resources. They have the FBI, IRS Criminal Investigation, and the SBA OIG working there cases. You need an attorney who understands federal criminal defense and who isn't afraid to fight. We're not going to tell you everything will be fine if it won't. We're not going to make promises we can't keep. But we will fight for you at every stage of the process.

The key to any PPP fraud case is early engagement. If you wait until your indicted, we're playing defense. If you come to us when you first get a denial letter or an SBA OIG inquiry, we can be proactive. We can negotiate before charges are filed. We can potentially avoid prosecution altogether. But that window closes fast.

PPP fraud prosecutions are going to continue through 2030. The government has referred over 669,000 loans for investigation. They're not slowing down. And with sentences increasing 40% in Louisiana in 2025, the stakes have never been higher. Don't assume your loan forgiveness means your safe. Don't assume that because the loan was approved, you can't be prosecuted. And don't assume you can handle this on your own.

Call Spodek Law Group at 212-300-5196. We'll give you straight answers about your situation and what your options are. No judgment. Just honest legal advice from attorneys who understand federal criminal defense and who care about getting you the best possible outcome.