NYC PPP Loan Fraud Lawyers

NYC PPP Loan Fraud Lawyers

FBI agents appeared at your Manhattan office. Or maybe it was an SBA auditor demanding records for your 2020 PPP loan – the one you applied for during lockdown when the rules changed weekly and you needed to keep employees on payroll. You filled out forms based on what you thought the SBA guidance meant, submitted documents your accountant prepared, got approved. Now, five years later, federal prosecutors are saying you committed bank fraud. You’re reading headlines about people getting 15 years in federal prison for PPP fraud, and you’re wondering if your business loan becomes a federal felony. Here’s what happens in your case, not the theoretical maximums designed to terrify you into a plea.

Thanks for visiting Spodek Law Group – a second-generation law firm managed by Todd Spodek. We have over 40 years of combined experience defending federal fraud cases, including PPP prosecutions that started in 2020 and continue through 2025. This article tells you exactly what happens from the moment investigators contact you through sentencing, based on how these cases actually play out in federal court – including recent August 2025 sentencings. When prosecutors use 30-year maximum sentences to coerce guilty pleas, your Sixth Amendment right to counsel isn’t optional; it’s your only defense against disproportionate state power.

They’re Still Prosecuting PPP Cases in 2025

The Paycheck Protection Program ended in 2021. So why are federal prosecutors still filing charges in 2025? In August 2025, a Nevada man received over 15 years in federal prison for PPP fraud involving $11 million in loans he obtained with fabricated tax records. In June 2025, a federal jury convicted Stephanie Hockridge, founder of lender service provider Blueacorn, for processing “tens of millions of dollars in fraudulent PPP loans” – she faces up to 20 years when sentenced in October. Another defendant received 51 months in June 2025 for a $900,000 scheme. These aren’t old cases finally reaching resolution; these are new prosecutions for conduct from 2020.

Congress extended the statute of limitations for PPP fraud from five to ten years in 2022. That means federal prosecutors can charge you through 2031 for a loan you applied for in 2020. The DOJ allocated multi-year enforcement resources specifically for pandemic fraud – the Fraud Section has prosecuted over 200 defendants in more than 130 criminal cases and seized over $78 million in fraudulent proceeds. Pandemic fraud prosecution is a bipartisan political priority; there’s no electoral downside to prosecuting “PPP fraud,” so enforcement continues regardless of administration changes.

The government distributed over $800 billion with minimal oversight, then prosecuted borrowers when chaos produced questionable applications. When prosecutors target business owners who struggled to interpret contradictory SBA guidance during a pandemic, constitutional protections become the only barrier between aggressive prosecution and wrongful conviction.

Investigation to Sentencing

Your first indication of trouble: an SBA auditor sends a letter requesting documentation for your 2020 PPP loan. Payroll records, tax returns, bank statements. Or FBI agents appear at your business asking to “talk” about your loan application. Or a grand jury subpoena arrives demanding records. What you do next determines whether you face charges – and if charged, whether you receive probation or prison time.

Phase one: investigation. SBA audits flag inconsistencies. FBI opens an investigation, subpoenas documents from your bank and accountant, interviews employees. This lasts months, sometimes over a year. You might not know you’re under investigation until agents contact you or you receive a target letter. This is when counsel matters most – before you talk to investigators, before you turn over documents, before irreversible decisions.

Phase two: indictment. Grand jury charges you with 18 U.S.C. § 1344 (bank fraud), 18 U.S.C. § 1014 (false statements), 18 U.S.C. § 371 (conspiracy) – 30 years, 30 years, 5 years maximum respectively. You’re arrested or surrender. Initial appearance and detention hearing. Most nonviolent fraud defendants are released pending trial.

Phase three: pretrial (six to eighteen months). Your attorney gets discovery. You file motions to suppress evidence, motions to dismiss counts. Plea negotiations begin. Here’s reality: 90% of federal cases resolve through guilty pleas. Not because everyone’s guilty – because of the trial penalty. Prosecutors offer three years if you plead; threaten ten if you go to trial and lose. That coercive power is why your constitutional right to trial exists more in theory than practice.

Phase four: resolution. You either accept a plea or proceed to trial. Sentencing occurs three to six months later. The judge calculates your guideline range based on federal sentencing guidelines – primarily loss amount. Prosecutors argue for prison time. Your attorney argues mitigating factors: repayment, acceptance of responsibility, criminal history, good faith reliance on advice.

Intent

The government must prove you intentionally misrepresented facts on your PPP loan application. Not that you made errors – that you knowingly submitted false information to obtain funds you weren’t entitled to receive. This intent requirement creates the primary defense in PPP fraud cases: good faith mistake. Consider early 2020’s confusion. The CARES Act left eligibility questions unanswered. The SBA issued FAQs, then revised them repeatedly. How do you calculate “payroll costs” for independent contractors? Can you include owner compensation? These were the difference between eligibility and fraud charges. Suppose you relied on your accountant to calculate payroll. Your accountant used a methodology including compensation categories the SBA later clarified were ineligible. Years later, prosecutors claim fraud. This is where the intent defense works: you didn’t knowingly submit false information; you relied in good faith on professional advice. That’s not a crime – that’s a paperwork error. Or the SBA guidance was unclear about eligibility. You interpreted it to allow your application. Prosecutors say you were wrong. But criminal fraud requires proof you knew your application was false. If reasonable people disagreed about SBA guidance – and in early 2020, they did – prosecutors can’t prove intentional fraud. Prosecutors charge you with 30-year maximum bank fraud, then offer five years to plead. That coercive dynamic forces innocent people to accept convictions. The constitutional principle: punishment should fit the crime, not prosecutor discretion. When the line between paperwork error and federal felony depends on interpreting ambiguous pandemic guidance, presumption of innocence separates legitimate prosecution from overreach. The Nevada defendant who got 15+ years in August 2025? He obtained $11 million through multiple fraudulent applications, purchased 25 properties and luxury cars, laundered money using an alias. That’s not ambiguous SBA guidance; that’s systematic money laundering. At the other end: defendants who obtained small loans based on good faith errors and repaid before sentencing sometimes receive probation. Sentencing depends on loss amount – guidelines increase dramatically as loss increases. A $50,000 fraud and $1 million fraud carry vastly different ranges. Acceptance of responsibility: pleading guilty brings a three-level reduction, often the difference between prison and probation. Restitution before sentencing demonstrates remorse. First-time offenders receive lower sentences than those with priors. Cooperation investigating other cases brings significant reductions. Recent sentences: $11 million with money laundering got 15+ years. $900,000 scheme got 51 months. Smaller amounts with mitigating factors: supervised release or short terms. Guidelines provide ranges; judges have discretion to depart based on circumstances.

When FBI agents searched your office, did they have a warrant? If they searched without a warrant or exceeded its scope, evidence gets suppressed under the Fourth Amendment. Sometimes suppressing key evidence collapses the government’s case.

When agents interviewed you, did they advise you of Miranda rights before custodial interrogation? Did they continue questioning after you invoked your right to remain silent? Statements obtained in violation of the Fifth Amendment get suppressed. If your confession was the prosecution’s centerpiece and gets suppressed, the case might collapse.

Did prosecutors rely on evidence from an administrative subpoena that exceeded authority? Did investigators coerce your accountant into providing privileged documents? These aren’t technicalities – these are constitutional protections that exist because government power can be abused.

The “insufficient evidence” defense challenges government burden. Prosecutors must prove every element beyond reasonable doubt. If evidence shows errors but doesn’t prove intentional fraud – if your SBA interpretation was objectively reasonable even if wrong – government hasn’t met its burden.

At Spodek Law Group, we’ve defended clients facing federal fraud charges for over 40 years. We’ve represented defendants in cases ranging from wire fraud to securities fraud to pandemic relief fraud. Our approach: hunt for constitutional violations during the investigation, challenge every piece of evidence the government wants to introduce, force prosecutors to actually prove intent beyond reasonable doubt, and argue mitigating factors aggressively at sentencing. Todd Spodek has represented clients in high-profile federal cases – including cases where media and public opinion ran heavily against the defendant before trial even began. That’s when vigorous advocacy matters most: when prosecutors have power, when public pressure demands convictions, when constitutional protections are the only thing standing between you and disproportionate punishment.

Call 212-300-5196.