The SBA has already compared your PPP application to your tax returns. They've had three years to find the discrepancies – and they found them. That algorithm that flagged your numbers in 2021? A federal prosecutor is looking at that flag right now. PPP fraud prosecutions aren't winding down. The statute of limitations is just hitting for 2020 loans. We're Spodek Law Group – and we've defended these cases since the first wave of prosecutions. This is what you need to understand: the investigation isn't starting. It's probably ending. You're the last to know.
The rules were changing daily during the pandemic. The confusion was real. We get it – we've seen dozens of business owners in exactly your position, trying to keep their companies alive while paperwork requirements shifted constantly. But here's what nobody explains: the chaos that made PPP loans easy to get is precisely what makes the fraud easy to prove. Every application, every bank deposit, every payroll record – it all exists. They've had years to piece it together.
You were trying to save your business during a pandemic. That instinct makes sense. But the moment a subpoena arrives or an agent calls, your status fundamentally changes. What you say and do in the next forty-eight hours matters more than anything you did in 2020. Thats the asymmetry were dealing with here – they had years to prepare, you have days to respond.
The Investigation That Started Years Ago
The SBA didnt need to investigate your PPP application individually. They built something far more efficient – a data matching system which automatically compared every single application against tax returns, unemployment records, and banking information. This is the mechanism nobody explains to you. If you claimed ten employees but your payroll records show three, a flag went up automatically in 2021. That flag sat in a queue, basically waiting for a prosecutor to get around to reviewing it. Now, three years later, someone is finally looking at your file.
What does this actually mean for you? By the time anyone contacts you – whether that's a phone call, a target letter, or agents at your door – they've already seen the discrepancy. The algorithm did the investigative work years ago. The human prosecutor isnt discovering anything new. They're just confirming what the computer already flagged. Other firms tell you PPP investigations are happening. They don't explain that the algorithm already found the problems. The human reviewer is just checking the computer's homework.
In terms of evidence, look at Operation Paycheck Protection – the DOJs coordinated enforcement initiative. Over $14 billion in fraud has been charged so far. More than 3,500 defendants. This isnt a few bad actors getting caught. This is systematic enforcement built on automated data matching that compares every application to every tax return. The machine found everyone who lied. Now theyre working through the list.
The consequence should be clear. Youve probably already been scored and sorted. If your numbers didnt match, you're in a queue. That queue is getting shorter every week as prosecutors work through cases before the statute runs out. The urgency you feel right now? Its real. But heres the thing – we've defended physicians, business owners, and entrepreneurs facing this exact situation. We understand the data matching, we know how to challenge the algorithms conclusions, and we know how to fight back when the numbers dont tell the whole story.
So now you understand: they've had years to build this case while you were running your business. But here's what makes it even more dangerous than that...
Four Agencies, One Target
There's not one investigation into your PPP loan. There's four – and they're all coordinating against you. This is something most lawyers don't adequately explain, maybe because they don't fully understand it themselves. The SBA's Office of Inspector General investigates program fraud. The FBI investigates bank fraud, and guess what – every PPP loan went through a bank. The IRS Criminal Investigation Division looks at false statements on your tax returns related to PPP funds. And if any of your paperwork went through the mail, the Postal Inspection Service probably has jurisdiction too.
How does this actually work? These agencies dont compete with each other. They coordinate. When SBA-OIG finds something interesting in your application, they share it with the FBI. When the FBI discovers bank fraud evidence, they share it with IRS-CI. That single PPP loan you received three years ago? Its generating parallel investigations at four different agencies, and all of them are talking to each other daily. Youre not defending one case. Youre defending against four simultaneous attacks from four different angles.
We've seen this pattern before – in healthcare fraud cases, in complex financial investigations. Multi-agency coordination isnt new. But for PPP fraud, its particularly devastating. Each agency has different charging authority. The SBA can pursue administrative penalties. The FBI can bring bank fraud charges carrying up to twenty years. The IRS can charge tax fraud. The Postal Service can pile on mail fraud counts. One loan, four agencies, potentially a dozen different charges.
What this means for you specifically is that the exposure is exponentially worse than most people realize. Your accountant probably handled the paperwork and told you everyone was doing it. That accountant had exposure on dozens of applications – maybe hundreds. Prosecutors offered them one deal to cooperate on all of those clients. The person who said "dont worry about it" is now explaining exactly what you did. We've seen this movie before, unfortunately. The facilitator flips first, and their clients are the ones who pay.
Four agencies, all coordinating, all sharing information. And here's where most people make the critical mistake that makes every one of those investigations worse...
Why Paying It Back Makes It Worse
The instinct is natural. You got money you maybe shouldn't have gotten, so you think: I'll just pay it back and make this right. This is precisely the trap we need to warn you about. Paying back the loan without proper legal counsel isnt a defense – its often evidence against you. Prosecutors will argue: why would an innocent person repay unless they knew it was wrong? That instinct to "make it right" before talking to a lawyer could be the thing that sinks you.
Heres how this actually plays out in court. The government has to prove willfulness – that you knew your application was false when you submitted it. If you genuinely believed you qualified, that's a real defense. But voluntary repayment, without counsel framing it properly, gets introduced as "consciousness of guilt." You basically handed them an admission that you knew something was wrong. We've seen cases where repayment was the single most damaging piece of evidence – more damaging than the false application itself.
The myth that paying it back fixes everything is everywhere. I think partially because it feels intuitively right. You took something you shouldn't have, you give it back, everyone's happy. But federal prosecution doesn't work that way. The crime already happened. Repayment goes to restitution, not to whether you committed fraud. And when you repay before being charged, without counsel, it looks like you're admitting you knew all along.
This is deeply unfair in some ways. People who genuinely made mistakes and genuinely want to make it right end up in worse positions than people who lawyer up immediately and say nothing. The system rewards silence and punishes good intentions. We dont like it either, honestly. But we have to tell you the truth about how this works. If you're thinking about repaying – if youve already repaid – we need to talk before you say anything else to anyone.
So repaying fails. Explaining yourself fails. Most natural instincts in this situation make things worse. What actually works?
The Defense That Actually Works
Here's the reframe that matters: the question isn't whether you committed fraud. The question is whether the government can prove you KNEW your application was false when you submitted it. Willfulness is the key element – and its the element most prosecutors struggle to prove when defendants have proper representation. If you genuinely believed you qualified, if you relied on professional advice, if the rules were confusing and you made a good-faith mistake – these arent just excuses. They're potentially complete defenses.
The mechanism here is important to understand. Federal fraud statutes require proof of intent. The government cant just show your numbers were wrong. They have to show you knew they were wrong when you submitted them. If your accountant told you that you qualified, and you relied on that advice in good faith – thats not mitigation. That's an element the government has to disprove beyond a reasonable doubt. We've seen PPP cases crumble when defendants could demonstrate genuine confusion about eligibility requirements.
Evidence matters here. We look at what you were told, by whom, and when. We examine the contemporaneous records – not what you remember now, but what actually happened in spring 2020 when everything was chaos. We identify the advice you received and document your reliance on it. Good faith isn't just something you claim – it's something we prove with records, emails, and testimony about what information you actually had.
The consequence of building this defense properly is substantial. Cases that look overwhelming from the outside often have weaknesses the government knows about and hopes you don't discover. Statute of limitations issues – did they charge within five years of the actual offense? Proof problems – can they really show you knew the numbers were wrong? Cooperator credibility – is their star witness someone who lied to fifty other clients too? We poke holes in the prosecution's case at every point. Thats what we do.
This is what Spodek Law Group brings to your case. We've defended PPP fraud allegations since the first prosecutions. We understand the data matching systems, we know the multi-agency coordination playbook, and we know how to build the willfulness defense when it's available. Your case isnt hopeless – even if it feels that way right now.
The statute of limitations is five years for most PPP fraud charges. That 2020 loan you got in April? The government has until April 2025 to charge you – and they know it. They're working weekends to get through the backlog. Every month that passes makes prosecutors more aggressive because they're running out of time. The urgency you feel? We feel it too.
Call Spodek Law Group at 212-300-5196. We offer white-glove service because that's what these cases require – not assembly-line defense, but careful, strategic representation built on understanding exactly how PPP fraud cases work. We fight these cases every day. The clock started when you read this page. How you respond in the next forty-eight hours determines what happens over the next several years of your life. We get it – this is terrifying. But we've been here before, and we know the path forward.
