Oklahoma PPP Loan Fraud Lawyers: When Emergency Relief Becomes Federal Prosecution

The PPP application wasn't just paperwork requesting emergency relief during a pandemic. It was a sworn legal document where you certified facts "under penalty of perjury." Every number you entered - employee count, payroll expenses, revenue figures - became a prosecutable false statement if incorrect. The government designed it this way. By clicking "I certify," you created documentary evidence for your own federal prosecution.

And here's what nobody told you: loan forgiveness is a CIVIL process reviewing whether you used the money correctly. Criminal prosecution is a SEPARATE FEDERAL INVESTIGATION reviewing whether you lied to get it. The SBA can forgive your loan while the DOJ indicts you. Different question. Different agency. Different outcome. At Spodek Law Group, we represent clients facing PPP loan fraud investigations across Oklahoma - Oklahoma City, Tulsa, Norman, and statewide. Our mission is to provide clear, honest guidance when you're dealing with federal criminal exposure you didn't see coming. Call 212-300-5196.

The forgiveness letter you received doesn't mean you're in the clear. This means the SBA has determined that you used the funds for eligible expenses. It says nothing about whether you lied to obtain them. That's a different legal question, handled by other federal agencies, under other laws. And the prosecutions are underway in Oklahoma.

You Signed a Legal Confession When You Applied for PPP Relief

You remember the application. How many employees do you have? What was your average monthly payroll in 2019? What's your business revenue? You filled out the numbers, you checked the boxes, you clicked submit. Emergency relief during an economic crisis. The government was handing out money to keep businesses afloat. You applied like millions of others.

But look at the certification language you signed. "I certify that the information provided in this application and the information provided in all supporting documents and forms is true and accurate in all material respects. I understand that knowingly making a false statement to obtain a guaranteed loan from SBA is punishable under the law, including under 18 USC 1001 and 3571 by imprisonment of not more than five years and/or a fine of up to $250,000."

You signed that under penalty of perjury. That means if any number you entered was wrong - if you inflated your payroll, if you overstated employee count, if you claimed expenses that didn't exist - you didn't just make a mistake on a government form. You committed a federal crime. And you documented it yourself. No wiretaps needed. No undercover agents. No surveillance. You wrote your own indictment and submitted it electronically with a timestamp.

Defense attorneys call this the "certification trap." Prosecutors don't need to prove you intended fraud through circumstantial evidence. You signed a legal document under oath. What you certified was false. The government gave you money based on that false certification. Thats the crime. The documentary evidence is the application itself. Your signature. Your submission.

And here'wherere it gets worse. Courts are rejecting the defenses you think you have. "My accountant told me I qualified." Judges respond: "You signed under penalty of perjury. The law required YOU to verify the truth. Your accountants advice is irrelevant." The duty to verify was yours the moment you clicked that certification box. Reliance on professional advice has been rejected in nearly every PPP fraud case that's gone to trial.

This is different then other federal fraud prosecutions. In securities fraud, in healthcare fraud, in tax fraud - prosecutors have to prove you intended to deceive, that you knowingly made false representations. Thats hard. It requires witness testimony, documentary trails, proof of intent. But in PPP fraud, you gave them intent when you signed under penalty of perjury. You certified you knew the information was accurate. If it wasn't, the intent is presumed.

The application was designed this way. The "under penalty of perjury" language wasn't accidental. It was a prosecutorial tool built into emergency relief. When you applied for help, you were actually creating evidence. And the government kept all of it.

The SBA Forgave Your Loan. The DOJ Still Indicted You.

Madinah Montgomery got her PPP loan forgiven. The SBA reviewed her application, approved forgiveness, and sent her a letter. Congratulations. Loan forgiven. She thought she was done. Then in November 2024, she was sentenced to 24 months in federal prison, three years of supervised release, and ordered to pay $300,000 in restitution to the United States. For the same loan the SBA forgave.

This is the part nobody understands. Loan forgiveness is not immunity from prosecution. There completely separate systems.

The SBA loan forgiveness process asks: "Did you use the money for eligible expenses?" Payroll. Rent. Utilities. Mortgage interest. If you spent the money on those things, the SBA forgives the loan. Thats a civil determination. An administrative review. The SBA is looking at whether you complied with program rules after you got the money.

The DOJ criminal investigation asks: "Did you lie to GET the money?" Did you inflate payroll. Did you fabricate employees? Did you claim a business that didn't exist? Did you alter tax documents. Thats a criminal determination. A federal prosecution. The DOJ is looking at whether you committed fraud to obtain the funds in the first place.

Different question. Different agency. Different legal framework. The SBA can say "you used it correctly, loan forgiven" while the DOJ simultaneously says "you lied to get it, your going to federal prison." Both can be true at the same time. And both are happening.

The SBA and DOJ share information. When the SBA audits your loan and finds discrepancies, they refer the case to the SBA Office of Inspector General. The OIG investigates. If they find evidence of fraud, they refer to DOJ. DOJ opens a criminal investigation. FBI agents get involved. IRS Criminal Investigation gets involved. They pull bank records. They interview witnesses. They build a case.

Meanwhile, the SBA might still forgive your loan. Because the SBA determination is: "Did you spend it on payroll?" And maybe you did. Maybe you inflated the payroll numbers to get a bigger loan, but you actually did spend the money on payroll. The SBA forgives it. But the DOJ prosecutes you for lying about the numbers to get the bigger loan. The forgiveness and the prosecution are running on parallel tracks.

In Oklahoma, this is happening right now. The Western District of Oklahoma established a Coronavirus Fraud Task Force that is still active, still reviewing loans, still referring cases for prosecution. The Northern District of Oklahoma sentenced three PPP fraud defendants in October 2023 alone. Not 2020. Not 2021. 2023. Years after the loans were disbursed. Years after some were forgiven.

The Sullivans applied for aproximately $2.7 million in PPP loans from area banks in the Northern District of Oklahoma. They submitted false W2s, false Form 941s, false IRS Schedule Cs. They got the money. Then they were indicted, convicted, and ordered to pay $743,776.98 in restitution to the SBA and serve prison time followed by 5 years of supervised release.

Six Oklahomans were charged in August 2023 with fraudulently obtaining nearly $1 million in PPP loans. The indictment alleges they created ficticious businesses, submitted fake bank statements, altered identification documents, falsified tax records. 28 counts. Wire fraud. Money laundering. Making false statements to financial institutions. These indictments came THREE YEARS after the loans were disbursed. Some of those loans may have been forgiven by the SBA. Didnt matter. The DOJ prosecuted anyway.

When you get a forgiveness letter from the SBA, your not receiving immunity. Your receiving a determination that you spent the money correctly. The question of whether you lied to get it is still open. And the statute of limitations gives prosecutors ten years to answer it.

3.7 Million PPP Recipients Were Flagged Before Committing Any Crime

Every PPP application you submitted went into SBA databases. Those databases fed into fraud detection algorithms run by the Government Accountability Office, the SBA Office of Inspector General, and the Pandemic Analytics Center of Excellence. The algorithms analyzed the data. Employee counts that didnt match tax filings. Businesses that appeared not to exist. Multiple applications from the same individuals. Applications submitted shortly after business formation. Payroll numbers that didnt align with prior year tax returns.

The GAO identified over 3.7 million unique PPP recipients with fraud indicators. Out of 13.4 million total recipients. Thats 27% of everyone who got a PPP loan. You were flagged by an algorithm before anyone accused you of anything. Before any investigation. Before any indictment. The system decided you were suspicious the moment you applied.

You didnt know this was happening. You submitted your application, you got approved, you recieved the funds. Everything seemed fine. But in government databases, your name was on a list. A fraud indicator list. Your application was marked for potential review. And that list is still being worked.

By March 2024, the Pandemic Analytics Center of Excellence had provided investigative support to more than 47 federal law enforcement and OIG partners on over 780 pandemic-related investigations with an estimated potential loss of $2.03 billion due to fraud. Those investigations came from the flagged list. The algorithms identified targets. Then human investigators took over.

The SBA Inspector General's fraud hotline saw a 19,500% increase in volume. Over 238,000 calls. Aproximately 40,000 actionable complaints. Disgruntled employees. Ex-business partners. Competitors. People called in and reported suspected PPP fraud. Those calls went directly to investigators. Your name might be on that list too.

All loans of $2 million or greater were automatically flagged for enhanced scrutiny. But its not just the big loans. The algorithms flagged smaller loans too. Inconsistencies in employee counts. Revenue figures that didnt make sense. Businesses formed in 2020 claiming 2019 payroll. The system was designed to catch everything.

And heres what makes this terrifying: Congress extended the statute of limitations to 10 years specifically for PPP fraud. First-round PPP loans were disbursed in 2020. That means the government has until 2030 to prosecute. Second-round loans went out in 2021. Prosecutable until 2031. The government has a decade to work through the 3.7 million flagged recipients. And there just getting started.

Since May 2021, the COVID-19 Fraud Enforcement Task Force has charged over 3,500 defendants with federal crimes related to pandemic relief fraud. That's not "a few bad actors." Thats industrial-scale prosecution. And in 2025, there still going. The investigations havent stopped. The prosecutions havent slowed. If anything, there ramping up.

You thought you got away with it because its been three years, four years, five years since you got the loan. But the standard statute of limitations for federal fraud is five years. For PPP fraud, its ten. You havent gotten away with anything. Your still within the prosecution window. And your name might already be on the list.

By the Time You Found Out About the Investigation, It Had Been Running for Months

Most people dont find out there under investigation from a formal letter. They find out through a panicked phone call. A former employee says FBI agents just showed up asking questions. An accountant says federal investigators requested documents. A business partner got subpoenaed to testify before a grand jury.

By the time you get that call, the investigation has been running for months. The FBI already has your bank records. The IRS Criminal Investigation division already pulled your tax returns. Federal agents already interviewed witnesses. Those witnesses werent represented by counsel. They talked. All of it documented in FBI 302 reports that will be used against you.

An algorithm flags your PPP loan. Someone calls the fraud hotline. A bank files a Suspicious Activity Report. The case gets assigned to FBI, IRS-CI, or SBA-OIG. They pull your application, bank records, tax returns, payroll records. They build timelines. Chart money flows. Document every car purchase, vacation, personal expense. Anything inconsistent with your application - there documenting it.

Then they interview witnesses. Show up at peoples homes. "Were investigating PPP loans." The person panics, thinks cooperating helps, answers questions. Sometimes they say things that arent true because there scared. The FBI writes it all down. Those statements become evidence.

This process takes 12 to 24 months. The entire time, you dont know its happening. Your going about your life. The forgiveness letter came. Your in the clear.

Then you get the call. Or FBI agents show up. Or you receive a target letter. And you realize the investigation has been running without you knowing.

By that point, its almost too late. The prosecutors case is built. They have documentary evidence, witness statements, expert analysis. There not reaching out because there starting the investigation. There reaching out because there finishing it. The call is not the beginning. Its the end.

And this is were people make catastrophic mistakes. They think they can explain it to the FBI. So they talk without a lawyer. They make inconsistent statements. They misremember details under pressure. They contradict what a witness already said.

Now the prosecutor has another charge: 18 USC 1001, making false statements to federal agents. Up to 5 years. You just added 5 years to your potential sentence by trying to cooperate. The original PPP fraud charge carried 20 years for wire fraud. Now its 25.

Defense attorneys tell clients: Do not talk to federal agents without your attorney present. Ever. Even if you think your innocent. Even if you think you can clear this up. The agents arent there to clear anything up. There there to gather evidence for prosecution. Anything you say will be used against you. Nothing you say will help you.

But by the time most people call a lawyer, theyve already talked. Theyve already made the mistakes that destroy there defense.

Every Defense You Think You Have Isn't Going to Work

"My accountant told me I qualified." Courts have rejected this defense in nearly every PPP fraud case. Judges say: You signed the application under penalty of perjury. The certification required YOU to verify the accuracy of the information. What your accountant told you is irrelevant. You had a legal duty to ensure the information was correct. If you relied on someone elses advice without verifying it yourself, that doesnt excuse the false certification.

The reliance-on-advisor defense works in some areas of federal law. Tax fraud, sometimes. Securities fraud, occasionally. But in PPP fraud, the certification language kills it. You didnt just submit information. You swore under penalty of perjury that it was accurate. The court reads that as: You verified it. You knew it. If you didnt actually verify it, you committed perjury. Either way, your guilty.

"I made an honest mistake." Prosecutors counter: Then why didnt you use the safe harbor period. In May 2020, the SBA announced a safe harbor provision. If you recieved a PPP loan and then determined you didnt actually qualify, you could return the funds by May 18, 2020. No questions asked. No penalties. No prosecution. The government gave you an out.

If you had good-faith doubts about whether you qualified, you had a clear opportunity to return the money. The fact that you kept it proves you either believed you qualified - which means you knowingly submitted false information - or you knew you didnt qualify but wanted to keep the money anyway - which means you committed intentional fraud. Either way, the safe harbor period is now used AGAINST you. Prosecutors argue: The safe harbor proves you didnt have honest doubts. You kept the money. That proves intent.

"It was only $30,000. There going after the big fish, not me." Wrong. In Oklahoma, Brian Foster pleaded guilty to PPP fraud for a $20,833 loan. Federal conviction. Criminal record. There is no floor. There is no amount too small to prosecute. Prosecutors are bringing cases on loans under $50,000. Under $25,000. If the evidence is there, there prosecuting.

The idea that "small loans dont get prosecuted" is a myth that destroys people. They think there safe because the loan was only $40,000 or $60,000. Then they get indicted. Then they realize the prosecution doesnt care about the amount. They care about the false statement. You lied on a federal document. You certified it under penalty of perjury. The amount is just the loss calculation for sentencing. The crime is the lie.

"I cooperated with the SBA audit. That shows good faith." No. It shows you handed prosecutors evidence. The SBA shares audit findings with the DOJ through "Access Requests." Your cooperation with the SBA audit - the documents you provided, the explanations you gave, the statements you made - all of that gets shared with federal prosecutors. Your civil cooperation becomes criminal evidence.

The SBA audit is not separate from the criminal investigation. Its part of it. The auditor identifies discrepancies. Refers the case to the SBA Office of Inspector General. The OIG investigates. Refers to DOJ. DOJ opens a criminal case. Everything you said to the auditor is now in the prosecutors file. You thought you were showing good faith. You were actually building the governments case.

"Ill just pay the money back now." Repayment doesnt make the charges go away. It can help at sentencing - judges consider restitution when determining sentence length. But repayment is also evidence of guilt. Prosecutors argue: Why would you pay back money you legitimately qualified for. The repayment shows consciousness of wrongdoing. You knew you didnt qualify. Thats why your paying it back.

Paying back the loan after you receive a target letter or after agents contact you is too late to avoid prosecution. It might reduce your sentence. But your still facing charges. The crime was the false certification, not the failure to repay. Repaying doesnt undo the certification.

These defenses sound logical. They sound like they should work. But in PPP fraud prosecutions, there failing. Courts are rejecting them. Prosecutors are countering them. And defendants who relied on these defenses are going to federal prison.

Oklahoma Is Prosecuting PPP Cases Right Now - And the Sentences Are Real

In November 2024, Madinah Malikah Montgomery of Oklahoma City was sentenced to 24 months in federal prison for wire fraud related to a fraudulent EIDL loan. She claimed she owned a salon with 10 employees and gross revenues of $600,000. She didnt. The SBA approved the loan anyway and deposited $149,900 to her bank account in Enid, Oklahoma. She was ordered to pay $300,000 in restitution - double what she received - plus three years of supervised release after her prison term.

October 2023, the Northern District of Oklahoma sentenced three separate defendants for PPP fraud in the same month. The Sullivans fraudulently applied for $2.7 million using false W2s, false Form 941s, false Schedule Cs. Prison time. $743,776.98 in restitution. Five years of supervised release. Stephanie Pinkney made fraudulent loan applications for a business that didnt exist before the pandemic, recieved forgiveness for 100% of the loans, and was convicted of wire fraud.

In August 2023, a federal grand jury returned a 28-count indictment against six Oklahoma residents - Marquita Deshawn Shaw, Amie Street, Corey Donta Shaw, Eric Dewayne Shaw, Marqus Dejuan Shaw, and Shatara Marie Brevelle. Nearly $1 million in fraudulent PPP loans. Conspiracy to commit wire fraud. Wire fraud. Money laundering. Making false statements to financial institutions. Making false statements. False representation of social security numbers. They created ficticious businesses. Submitted fake bank statements. Altered IDs. Falsified tax records.

These arent cases from 2020 or 2021 when the program was active. These are prosecutions happening in 2023, 2024, 2025. Years after the loans were disbursed. The Western District of Oklahoma and Northern District of Oklahoma both have active Coronavirus Fraud Task Forces. There still investigating. Still indicting. Still prosecuting.

And the potential sentences are staggering. Wire fraud under 18 USC 1343 carries a maximum of 20 years in federal prison. Money laundering under 18 USC 1956 carries another 20 years. Conspiracy under 18 USC 371 carries 5 years. Making false statements under 18 USC 1001 carries 5 years. Bank fraud under 18 USC 1344 carries 30 years and up to $1 million in fines.

Prosecutors stack the charges. Wire fraud + money laundering + conspiracy + false statements = 50 years of potential exposure. They dont need all of it to stick. They dont need you to go to trial. They just need you to be terrified enough to plead guilty. The stacked charges create plea leverage. You plead to one count of wire fraud, recommend 24-36 months, avoid the risk of 50 years if you go to trial and lose.

Nationally, some sentences have been extreme. Carl Delano Torjagbo in Marietta, Georgia was convicted of obtaining a fraudulent $9.6 million PPP loan. He faces a MAXIMUM of 170 years in federal prison. Not a typo. One hundred seventy years. Amir Aqeel in Houston was sentenced to 15 years for leading a $20 million fraud ring - one of the largest PPP fraud cases prosecuted by DOJ.

Even smaller cases are resulting in prison time. Federal judges are including incarceration in most PPP sentencings. The message from the bench is clear: This wasnt a victimless crime. This was theft of taxpayer money during a national emergency. The courts are not sympathetic.

If your under investigation in Oklahoma, or if youve recieved an audit letter from the SBA, or if federal agents have contacted you or people around you, the time to act is now. Not later. Not after the indictment. Now.

What You Need to Do If You're Under Investigation or Received an Audit Letter

First, do not talk to anyone about your case except your attorney. Not the SBA. Not the FBI. Not IRS agents. Not your accountant. Not your business partner. Not your spouse. Anyone you talk to can be subpoenaed as a witness. Anything you say can be used against you. The only person protected by attorney-client privilege is your lawyer.

Second, do not destroy any documents. Do not delete emails. Do not alter records. Do not "clean up" your files. Obstruction of justice under 18 USC 1512 carries up to 20 years in federal prison. If agents think you destroyed evidence, you just added another 20-year charge to your case. Preserve everything. Let your attorney determine what should be produced and when.

Third, do not try to fix the problem by paying money back or filing amended documents without consulting counsel first. Repayment can be evidence of guilt. Amended filings can create new false statements if not done correctly. Everything you do now is being watched. Everything you do now is evidence. You need a lawyer to guide every step.

Fourth, understand what your actually facing. This is not a civil dispute. This is not an audit. This is a federal criminal investigation. If your name came up, if you received a target letter, if agents contacted witnesses around you - prosecutors are building a case. The investigation is not exploratory. Its confirmatory. There trying to confirm what they already believe happened. You need a defense strategy, not explanations.

Fifth, hire a federal criminal defense attorney with experience in PPP fraud cases. Not a general practice attorney. Not a state criminal lawyer. Not a civil litigator. You need someone who understands 18 USC 1343 wire fraud, 18 USC 1001 false statements, 18 USC 371 conspiracy. Someone who understands how DOJ works with SBA-OIG and FBI on these cases. Someone who has negotiated with federal prosecutors before.

At Spodek Law Group, we represent clients nationwide facing federal PPP loan fraud investigations and prosecutions. Our team, led by Todd Spodek, has handled complex federal fraud cases and understands the intersection of civil and criminal exposure in PPP cases. We intervene early - before indictment when possible - to negotiate with prosecutors, provide context and evidence, and in some cases prevent charges from being filed.

If charges have already been filed, we build a defense strategy based on the specific facts of your case. We challenge the governments evidence. We examine whether the prosecution can prove intent. We negotiate plea agreements when appropriate. We fight at trial when necessary. Every case is different. Every defense is tailored to the client.

The worst thing you can do is nothing. The second worst thing you can do is try to handle it yourself. Federal investigations dont go away. They escalate. And once you make mistakes - talking to agents without counsel, destroying documents, filing false amended returns - those mistakes become new crimes that make your situation exponentially worse.

Todd Spodek and the Spodek Law Group have built a practice on defending clients when the stakes are highest. When your freedom is on the line. When your facing decades in federal prison. When prosecutors have evidence and your looking at an indictment. We dont sugarcoat the situation. We tell you what your actually facing. We build a defense based on law and facts. And we fight.

If your in Oklahoma - Oklahoma City, Tulsa, Norman, or anywhere in the state - and your dealing with a PPP loan fraud investigation, call us at 212-300-5196. Initial consultations are confidential. We'll review your situation, explain your options, and tell you what comes next. The investigation is not going to stop on its own. But with the right representation, you can navigate it without making it worse.

The PPP loan you thought was emergency relief has become federal criminal exposure. The certification you thought was routine paperwork has become documentary evidence. The forgiveness letter you thought meant you were done has no bearing on whether your prosecuted. You need to understand the system your in. And you need a lawyer who understands it too.

Call Spodek Law Group. 212-300-5196. Were here to help.