Memphis PPP Loan Fraud Lawyers
You got a PPP loan back in 2020. Maybe 2021. Everyone in Memphis did - the pandemic hit Shelby County businesses hard, and the government was offering what seemed like free money to keep employees on payroll. You filled out the application, got approved, maybe even got forgiveness. That was years ago. You assumed the federal government had moved on to bigger problems.
It hasn't.
The federal government turned Memphis into a PPP fraud prosecution hub - and if you got a questionable loan in 2020, the 10-year statute of limitations means you're still directly in the crosshairs. The Western District of Tennessee has a dedicated COVID fraud prosecution unit. In November 2024, they sentenced a Memphis man named Herman Shaw to 30 months for a $782,000 PPP scheme. In February 2025, they secured a guilty plea from Lisa Evans for a $5.1 million operation. They indicted 10 people at once in another coordinated takedown. The comfortable assumption that "it's been years, they've moved on" is exactly what prosecutors are counting on.
Welcome to Spodek Law Group. We handle federal PPP loan fraud defense in Memphis and throughout the Western District of Tennessee. If you've received a letter from the SBA Office of Inspector General, if federal agents have contacted you, or if you're simply worried about a PPP loan you received years ago - this article explains exactly what you're facing and what options might still exist.
The 10-Year Clock Is Still Running
In August 2022, President Biden signed the PPP and Bank Fraud Enforcement Harmonization Act. Most people missed what it actualy did.
It extended the statute of limitations from 5 years to 10 years - retroactively.
That means a PPP loan from 2020 is prosecutable until 2030. A loan from 2021 until 2031. The government gave itself a full decade to come for you. And there using it. As of December 2024, the DOJ continues to investigate PPP fraud as a top enforcement priority through the COVID-19 Fraud Enforcement Task Force. This task force coordinates investigations across FBI, IRS Criminal Investigation, SBA OIG, Secret Service, and Postal Inspection Service. They have specialized strike forces in major cities - and Memphis is one of them.
The SBA Office of Inspector General has recieved more than 238,000 hotline complaints since the pandemic began. From those, there data analytics team identified approximately 40,000 actionable complaints. They referred 669,000 PPP loans to investigators. Thats one in twenty of all loans issued. The investigations continue through 2030 and beyond.
Memphis Is in the Crosshairs
The Western District of Tennessee covers 22 counties in western Tennessee, including all of Shelby County and the Memphis metropolitan area. This isnt some theoretical possibility. The U.S. Attorney's office here established a dedicated COVID fraud prosecution unit.
Recent Memphis-area PPP fraud cases paint a picture of exactly how agressive the prosecution has become:
Herman Shaw (Memphis, November 2024): Shaw submitted a PPP loan application for Freight Masters, Inc., his trucking business. He claimed he had employees and payroll expenses that justified a $782,212 loan. After recieving the funds, he used them to pay gambling debts and personal expenses. He also paid a $262,000 kickback to an accomplice who helped him secure the fraudulent loan. Judge Thomas L. Parker sentenced him to 30 months in federal prison plus full restitution. That was for fraud committed in 2020 - four years before sentencing.
Dardanius Coleman (Memphis, August 2024): Coleman recieved 21 months in federal prison for defrauding the PPP program. Judge Thomas L. Parker also ordered him to pay $2,093,318 in restitution to the SBA - over $2 million - plus three years of supervised release after prison.
Lisa Evans (Olive Branch, February 2025): Evans pled guilty to conspiracy to commit wire fraud for running what prosecutors called a facilitator scheme. She submitted fraudulent PPP applications for numerous borrowers, using fake federal tax documents. Once borrowers recieved there PPP funds, they paid Evans kickbacks representing 20-30 percent of the loan amounts. Total loss to the program: aproximately $5.1 million. She faces up to 20 years at her May 2025 sentencing.
The 10-Person Indictment (October 2023, ongoing): A federal grand jury in the Western District charged ten individuals for there roles in schemes to defraud the EIDL and PPP programs. The defendants collectivley sought over $950,000 through fraudulent applications containing false statements about employee numbers, gross revenues, and payroll expenses. One defendant, Rodrick Flowers of Memphis, faces 12 counts of wire fraud. Another defendant, Stephen Brown - a pastor - allegedly submitted fraudulent applications obtaining approximately $149,900.
Five IRS Employees Charged: Perhaps most striking, five current or former IRS employees were charged in the Western District for schemes to defraud PPP and EIDL programs. If IRS employees face prosecution, nobody is immune.
The national statistics are equally grim. According to Pandemic Oversight, as of December 31, 2024:
- 3,096 defendants have been charged with pandemic relief fraud
- 2,532 defendants found guilty (82%)
- 1,741 recieved prison time (81% of those convicted)
- 2,008 ordered to pay restitution (94%)
- 440+ defendants ordered to pay $1 million or more in restitution
And heres the part that should concern anyone still waiting to see what happens: defendants sentenced in 2024-2025 are recieving sentences aproximately 40% longer then defendants who committed identical conduct but were sentenced in 2021-2022. The early pandemic leniency some federal judges showed - recognizing the economic chaos, the confusing guidance, the desperation - is completley over.
One Application, Five Federal Charges
You might think PPP fraud is a single crime. It isnt.
The PPP itself doesnt have criminal provisions. The CARES Act isnt a penal statute. So how are people going to federal prison? The DOJ uses pre-existing fraud statutes to prosecute PPP fraud. And they stack them.
One PPP application can trigger multiple charges:
- Wire Fraud (18 U.S.C. § 1343) - 20-30 years maximum
- Bank Fraud (18 U.S.C. § 1344) - 30 years maximum
- False Statements to SBA (18 U.S.C. § 1014) - 30 years maximum
- Money Laundering (18 U.S.C. § 1956) - 20 years maximum
- Aggravated Identity Theft (18 U.S.C. § 1028A) - mandatory +2 years consecutive
One PPP application can create theoretical exposure exceeding 100 years.
In practice, sentences dont reach anywhere near that level. Herman Shaw got 30 months, not 30 years. But charge stacking gives prosecutors enormous leverage in plea negotiations. They can offer to drop three charges if you plead to two. That "generous" offer still means federal prison, supervised release, and restitution you'll be paying for decades.
Theres no parole in the federal system. You serve at least 85% of whatever sentence the judge imposes. A 30-month sentence means you're doing roughly 25 months before release.
What You Should Do Right Now
The single most important rule:
Never agree to discuss a PPP fraud case with a federal agent without a lawyer present.
This sounds obvious. But recent cases show people who talked to investigators without counsel ended up being charged with obstruction or making false statements to federal agents - in addition to the underlying PPP fraud. The agents seem friendly. Cooperative. There not on your side. Every word you say becomes evidence. Every inconsistency between your memory and the documents becomes a potential false statement charge under 18 U.S.C. § 1001.
Theres a window most people dont know exists.
The SBA OIG investigation typically takes six to twelve months before the case gets referred to the FBI for criminal investigation. During this window - before FBI involvement - there may be leverage that completley disappears once criminal charges are filed. Civil disposition might be possible: repayment plus a civil fine, maybe a False Claims Act settlement. Not pleasant, but not a federal felony conviction either.
But heres the trap most people fall into.
Some people, panicking, decide to voluntarily repay the loan thinking it will make the problem go away. The DOJ has explicitly stated that voluntary repayment can be used as evidence of consciousness of guilt. Returning the money without counsel doesnt make it go away - it can actualy strengthen the governments case against you.
If your under investigation or concerned you might be:
- Dont destroy any documents. Document destruction can become a separate obstruction charge.
- Dont discuss the matter with others who may have been involved. Those conversations can be used against you.
- Dont make voluntary payments to the SBA without legal counsel. This can be used as consciousness of guilt.
- Contact a federal defense attorney immediately. The earlier you act, the more options exist.
Todd Spodek has handled PPP fraud cases and understands the difference between OIG-stage investigations where civil resolution may be possible, and FBI-stage investigations where criminal defense becomes the priority.
When Your Ready
If you're in Memphis - or anywhere in western Tennessee - and you're facing a PPP loan fraud investigation, Spodek Law Group can help you understand where you stand and what options might still exist.
The consultation is free. Theirs no obligation.
What you'll get is an honest assessment. Is this still at the OIG stage where civil resolution might be possible? Has it been referred to the FBI? What does the evidence look like? What are realistic outcomes - not best-case fantasies, but actual possibilities based on how these cases play out in the Western District of Tennessee?
Call us at 888-997-5177. The statute of limitations runs until 2030 or 2031 depending on when you got the loan. The government has time. But once they move, things happen fast - median investigation time has dropped 45% from what it was two years ago. The earlier you have counsel, the more leverage exists.
Dont wait until federal agents show up at your door.
Were here when you need us.
