New York City PPP Loan Fraud Lawyers
You got a PPP loan in 2020. Maybe 2021. The government was practically throwing money at businesses during the pandemic - everyone applied, everyone got approved, and then everyone moved on. You used the funds, maybe got forgiveness, and assumed that was the end of it.
It wasn't.
The federal government turned PPP loan fraud prosecution into an assembly line - and New York City is ground zero. The Southern District of New York (SDNY) and Eastern District of New York (EDNY) together prosecute more PPP fraud than almost any other region in the country. Congress extended the statute of limitations to 10 years in 2022 - retroactively. That 2020 loan you thought was ancient history? It's prosecutable until 2030.
Welcome to Spodek Law Group. We handle federal PPP loan fraud defense throughout New York City - Manhattan, Brooklyn, Queens, the Bronx, and beyond. If you're under investigation, if you've received a letter from the SBA Office of Inspector General, or if federal agents have contacted you - this article explains exactly what you're facing and what options exist.
The Government Is Still Coming - And NYC Is Ground Zero
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 - and it applied 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.
Theres a window - typically six to twelve months - between when the SBA OIG flags a loan and when the case gets referred to the FBI for criminal investigation. During this window, civil resolution may still be possible. But that window has shrunk by 45% since 2022. What used to take 8-12 months now takes 4-6 months. The government is moving faster then ever.
The SBA Office of Inspector General has recieved more than 250,000 hotline complaints since the pandemic began. From those, there data analytics team identified more than 95,000 actionable leads. As of 2024, aproximately 669,000 PPP loans had been referred to investigators - thats 1 in 20 of all loans issued.
SDNY covers Manhattan, the Bronx, Westchester, and surrounding counties. EDNY covers Brooklyn, Queens, Staten Island, and all of Long Island. Both districts are aggressivly prosecuting PPP fraud as a top priority. SDNY has an 88% indictment rate - meaning prosecutors prefer grand jury indictments even for cooperative defendants.
If your reading this and your stomach just dropped - we get it. Thats exactly why we put this information on our website.
The Numbers That Make Prosecutors Salivate
According to Pandemic Oversight, as of December 31, 2024:
- 3,096 defendants 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%)
Heres what changed. Defendants sentenced in 2024-2025 are recieving sentences aproximately 40% longer than those sentenced in 2021-2022 for identical conduct. Early pandemic leniency is completley over. Federal judges in 2025 are varying upward more often then down in PPP fraud cases.
IRS Criminal Investigation achieves a 98.5% conviction rate in prosecuted PPP fraud cases. Once your charged in federal court, conviction is virtualy certain.
Restitution amounts have reached $71 million in some cases. More then 440 defendants were ordered to pay $1 million or more. This isnt just prison - its financial devastation that follows you for life.
In SDNY, Adedayo Ilori recieved 25 years in prison for a $10 million COVID fraud scheme - one of the longest PPP-related sentences in the country. In Brooklyn, six family members were indicted in November 2025 for a $166,000 scheme involving fictitious businesses. Two NYPD detectives were charged with helping 65+ individuals submit fraudulent applications.
How One Application Becomes Five Charges
The PPP itself dosent have criminal provisions. The CARES Act isnt a penal statute. So how are people going to federal prison?
Prosecutors use pre-existing fraud statutes to stack charges. One PPP application can trigger multiple federal crimes:
One application can create theoretical exposure exceeding 100 years. In practice, sentences dont reach that level - but charge stacking gives prosecutors enormous leverage in plea negotiations.
"Do people actualy go to prison for a $20,000 PPP loan?"
Yes.
A Cincinnati defendant got 18 months in federal prison for $21,000 in PPP fraud in March 2025. The amount dosent protect you. Federal judges in 2025 include prison time in nearly every PPP sentencing regardless of the amount involved.
In New York City alone: 17 public employees - from NYPD, Department of Education, Department of Corrections, and Department of Transportation - were charged in a single sweep for collectively stealing more then $1.5 million. A Long Island woman was indicted for submitting 27 fraudulent applications worth $3.28 million.
What to Do If Your Under Investigation
The single most important rule:
Never agree to discuss a PPP fraud case with a federal agent without a lawyer present.
Federal agents seem friendly. Cooperative. There not on your side. There have been several recent cases where people who decided to talk to investigators without counsel ended up charged with obstruction or making false statements to federal agents - in addition to the underlying PPP fraud.
Even if you believe you did nothing wrong, inconsistencies in your story become evidence of "consciousness of guilt." Those inconsistencies can become a separate federal crime under 18 U.S.C. § 1001.
If your under investigation or concerned you might be:
- Don't destroy any documents. Document destruction can become a separate obstruction charge.
- Don't discuss the matter with others who may be involved. Those conversations can be subpoenaed.
- Don't make voluntary payments to the SBA without counsel. Voluntary repayment can be used as evidence of consciousness of guilt.
- Don't answer questions from federal agents without an attorney present.
Todd Spodek has handled PPP fraud cases in both SDNY and EDNY. He understands the difference between OIG-stage investigations where civil resolution may still be possible, and FBI-stage investigations where criminal defense becomes the priority.
The median investigation time has decreased 45% since 2022. Once the FBI takes over, things move fast. The earlier you have counsel, the more leverage exists.
When You're Ready
If you're in New York City and you're facing a PPP loan fraud investigation - or you're worried you might be - Spodek Law Group can help you understand where you stand and what options exist.
The consultation is free. There's 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 SDNY and EDNY?
Call us at 212-300-5196. 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.
Don't wait until federal agents show up at your door.
Were here when you need us.
