FEDERAL CRIMINAL LAWYERS

Montgomery EIDL Loan Fraud Lawyers

You got contacted about your EIDL loan. Not by the SBA – by federal investigators. IRS Criminal Investigation, maybe FBI, possibly SBA Office of Inspector General. You’re in Montgomery, Alabama, which means the Middle District US Attorney’s Office handles your case – a prosecutorial office that offers fewer plea deals and pushes harder for prison time than Birmingham’s Northern District. Thanks for visiting Spodek Law Group. Todd Spodek is a second-generation criminal defense attorney who has handled hundreds of federal fraud prosecutions, including dozens of pandemic loan cases in conservative judicial districts like Montgomery’s Middle District.

Here’s what happens when Montgomery’s federal prosecutors investigate your EIDL loan, why your location just made this significantly harder, and what you need to understand about the choices you have in the next 48 hours.

Montgomery Location Just Changed Your Case

Federal districts aren’t uniform. The US Attorney’s Office in Manhattan operates completely differently than the one in rural Montana. Montgomery’s Middle District sits somewhere in the middle – more conservative than Birmingham, more aggressive than most Southern districts, staffed by prosecutors who view pandemic loan fraud as theft of taxpayer money during national crisis. Montgomery matters. Location matters. The federal courthouse in Montgomery handles Middle District cases with a prosecutorial style that differs from Birmingham. Montgomery’s US Attorney’s Office offers fewer pre-indictment plea deals, pushes for higher Guidelines calculations, and fights harder on loss amount determinations. Montgomery juries – drawn from Montgomery County demographics – tend to be less sympathetic to fraud defendants than urban Birmingham juries. These translate to months or years of additional prison time. Here’s what most Montgomery residents don’t know: the overwhelming majority of criminal defense attorneys here handle state crimes. DUI, assault, theft – state charges prosecuted in Alabama courts. Federal fraud prosecution operates under completely different rules. Different statutes, different courthouse, different prosecutors with different resources. When Montgomery business owners hire the attorney who handled their cousin’s DUI, they’re bringing a state practitioner to a federal gunfight. The Middle District US Attorney’s Office recognizes this immediately – and the plea offers reflect it.

That “Clarification Interview”

Most EIDL fraud defendants cooperate immediately without counsel. Federal agents frame initial contact as administrative clarification. “We’re reviewing your EIDL application and noticed some discrepancies. Can you help us understand how you calculated your business revenue?” That sounds like a reasonable request to fix paperwork errors. It’s criminal investigation.

When you sit down to “clarify” your EIDL application without an attorney, here’s what’s actually happening. Agents already subpoenaed your bank records – every deposit, withdrawal, check, wire transfer from the day you received EIDL funds forward. They pulled your tax returns for 2018, 2019, 2020, 2021. They have your original EIDL application, your banking institution’s records. They compared your application’s revenue figures to your tax returns. They know what you claimed. They know what your returns show. They know where the money went. Now they need your statements to prove intent – that you knew the information was false when you submitted it. The Fifth Amendment right against self-incrimination exists precisely for this scenario. You are not obligated to provide the government with evidence to prosecute you. But here’s what happens when defendants talk anyway. You say you “estimated” revenue based on projected income. That becomes evidence you knew the current revenue didn’t support the loan amount. You explain you used EIDL funds for “business expenses” – rent, inventory, equipment. That becomes evidence you knew EIDL was designated for specific costs, and you spent it differently. You describe consulting with an accountant who “helped with the application.” That gives prosecutors a cooperating witness to flip against you. Your own words, offered in good faith, become the evidence that establishes criminal intent under 18 USC Section 1343.

The lawyered path functions differently. Your attorney doesn’t let you explain away discrepancies – those explanations become admissions. Instead, counsel evaluates what the government has, what they can prove without your statements, and whether the evidence demonstrates knowing false statements versus negligent errors. That distinction matters because it’s the difference between wire fraud (20 years maximum) and no charges at all. In Montgomery EIDL cases we’ve seen, early intervention creates leverage for pretrial diversion, declined prosecution, or favorable plea terms. Post-statement intervention means we’re playing defense with your own admissions as the government’s best evidence.

Actual Sentencing Numbers

The theoretical maximum sentence under 18 USC Section 1343 is 20 years federal imprisonment. That’s not what happens. Federal sentencing operates through mandatory Guidelines based on loss amount. The United States Sentencing Guidelines don’t have an “EIDL discount” or “pandemic sympathy” provision. Fraud is fraud. Loss amount determines your base offense level, which determines your Guidelines range, which determines your actual prison time.

Small EIDL loans ($10,000 to $50,000) with clear fraud typically result in probation to 12 months for first-time offenders who accept responsibility. Medium loans ($50,000 to $250,000) produce 18-36 month sentences – the most common range. Large loans ($250,000 to $1 million) result in 36-92 month sentences. Recent Middle District case: Phenix City defendant Kyle Nathan Carlisle received 92 months for $600,000 in EIDL fraud, sentenced January 2025. Montgomery defendant Tametria Conner Dantzler faces up to 20 years for $927,000 in fraudulent EIDL applications. Three factors affect where you land. Loss amount matters most – every dollar counts. Your criminal history matters second. No prior convictions means you’re in Criminal History Category I, lower end of the range. Acceptance of responsibility matters third. Federal Guidelines provide 2-3 level reductions if you plead guilty and accept responsibility. A defendant facing 36-48 months drops to 24-30 months with acceptance. That’s why most EIDL fraud cases resolve through plea agreements rather than trial.

But here’s what changed between 2021 and 2025. Early pandemic loan fraud defendants benefited from judicial sympathy – “these were unusual times, the program was confusing, mistakes were made.” That sympathy has evaporated. Montgomery federal judges now view EIDL fraud through the lens of taxpayer theft during crisis. Defendants sentenced in 2024-2025 receive prison terms approximately 40% longer than those sentenced in 2021-2022 for identical loan amounts and conduct. A $200,000 EIDL fraud that generated 18 months in 2021 now generates 28-30 months in Montgomery.

Loss amount fights matter because they determine everything. If your EIDL application claimed $175,000 but prosecutors can only prove $120,000 was fraudulently obtained, you just dropped from one Guidelines bracket to another – potentially 12-18 months less prison time. Montgomery prosecutors fight these calculations hard because they know loss amount determines sentencing exposure, and sentencing exposure determines whether defendants take plea offers or risk trial.

You have three choices. First: cooperate with investigators without counsel. You sit for the interview, answer their questions, “clarify” your application. What happens next: your statements become prosecution exhibits. Most defendants who choose this path realize too late that the “clarification” interview was the investigation’s critical moment. By the time they hire counsel, their own words have established the government’s case.

Second: retain counsel immediately. Before any statements, before any interviews, before responding to document requests. Your attorney evaluates what the government has, communicates that you’re represented, determines whether cooperation benefits you. This is the objectively superior path. Early intervention means we control what evidence the government gets. We can negotiate proffer agreements that limit statement use, provide documentation demonstrating good faith, engage in pretrial resolution discussions before you’re locked into a public indictment. Montgomery prosecutors respect this choice because they’re dealing with counsel who understand federal practice.

Third: ignore investigators. Don’t respond to calls, don’t answer emails, don’t engage. What happens: they indict you. Federal prosecutors don’t stop investigating because targets ignore them. This is the worst option. It demonstrates consciousness of guilt without providing Fifth Amendment protection, it eliminates pretrial resolution possibilities, and it signals to prosecutors that you won’t cooperate – which means they see no reason to offer favorable plea terms.

The choice you make in the next 48 hours determines your sentencing range. Todd Spodek has handled hundreds of federal fraud prosecutions, including pandemic loan cases in districts with prosecution styles similar to Montgomery’s Middle District. We’re available 24/7 at 212-300-5196.