Oregon PPP Loan Fraud Lawyers

The Paycheck Protection Program ended in May 2021. Most people who received questionable loans assume the prosecution window has closed by now. Your thinking may be that the government moved on to other priorities, that 2020 feels like ancient history, that surely they're not still investigating pandemic loans in 2026. But here's what actually happened: In August 2022—eighteen months after the program ended—Congress passed two seperate laws specifically extending the statute of limitations from five years to ten years. Not because they were running out of time to finish existing cases. Because they have over 130,000 loans already identified as suspicious and their working through them systematically, and they wanted to make absolutely certain that nobody escapes prosecution simply because processing that volume takes years. If you got a PPP loan in 2020, federal prosecutors have until 2030 to charge you. If you applied for forgiveness in 2021, they have until 2031. And they're not slowing down—the Department of Justice is announcing new PPP fraud charges on what one legal publication described as "an almost daily basis throughout 2025." At Spodek Law Group, we represent clients nationwide facing federal fraud charges, including individuals in Oregon dealing with PPP loan investigations. Our mission is to provide clear, honest information about what your actually facing and what your options are when the federal government comes after you. You can reach us at 212-300-5196.

This isn't theoretical. In March 2024, federal prosecutors sent a man named Kelton McClarrin to prison for eighteen months. The amount he defrauded? Less than $21,000. Thats less than the price of a used car, and he got a year and a half in federal prison for it. Meanwhile in Oregon, Andrew Lloyd from Lebanon stole $3.5 million in PPP funds, bought a Tesla and a Porsche, invested in Tesla stock, and by the time federal agents seized his assets the stock had grown to $18 million in value. He forfeited all of it—not just what he stole, but all the gains to. The government doesn't just take what you fraudulently obtained. They take what you bought with it, and everything that grew in value after. If you think your "small" loan means your safe, or that the window has closed, or that cooperation will fix everything, you need to understand how this actually works before you make a decision that destroys the rest of your life.

Todd Spodek and the attorneys at Spodek Law Group have spent years defending clients against federal prosecutors who have unlimited resources and a 93% conviction rate. We're not here to tell you what you want to hear. We're here to explain what prosecutors are actually doing, why the timeline is longer than you think, and what mistakes people make that turn a potential civil matter into a guaranteed federal prison sentence.

Why Congress Extended the Statute 18 Months After the Program Ended

Here's what most people don't understand about the ten-year extension. The Paycheck Protection Program distributed roughly $800 billion across millions of loans in 2020 and 2021. The government estimates that approximately 8% of that—around $64 billion—involved some level of fraud. That ranges from minor miscalculations all the way to people creating entirely fake businesses with stolen identities. Investigating that volume of potential fraud doesn't happen quickly. It takes years. And the original statute of limitations was only five years for wire fraud.

But here's were it gets interesting. If you got your PPP loan from a traditional bank like Chase or Wells Fargo or Bank of America, prosecutors could charge you with bank fraud under 18 USC 1344, which has always carried a ten-year statute of limitations. But a huge number of PPP loans didn't come from traditional banks. They came from fintech lenders—companies like Kabbage, BlueAcorn, Womply, and others. Because those companies aren't "financial institutions" under the technical legal definition, the bank fraud statute didn't apply. Prosecutors had to charge wire fraud instead, which only had a five-year statute of limitations.

So you had two people who committed identical conduct—inflated payroll, fake employees, whatever. One got their loan from Chase, the other from Kabbage. The Chase borrower could be prosecuted for ten years. The Kabbage borrower only five. Same crime, different timeline, purely based on which lender processed the application. That's the loophole Congress closed in August 2022. They passed the PPP and Bank Fraud Enforcement Harmonization Act of 2022 and the COVID-19 EIDL Fraud Statute of Limitations Act of 2022, both signed by President Biden, specifically to equalize the statute of limitations at ten years for everyone, regardless of lender type.

The message was clear. They intend to prosecute everyone, and they gave themselves until 2031 to do it.

Think about the timing. The program ended in May 2021. Congress extended the statute in August 2022. If the government was winding down PPP fraud prosecutions, why extend the deadline eighteen months after the program closed? Because they're not winding down. They're ramping up. The Pandemic Response Accountability Committee disclosed in August 2024 that aproximately 54,000 PPP loans had been referred to the Office of Inspector General for likely fraud, with another 77,000 escalated internally for additional review. That's over 130,000 loans that the government has already identified as problematic. Not "potential" fraud that might require investigation. Fraud they've already found. Their working through it systematically, and the ten-year statute ensures they have time to reach every single one.

The 130,000 Loans Already Flagged—And Why Your Timeline Might Be Wrong

So if your sitting there thinking "I got my loan in 2020, the statute expires in 2030, I've got time," you might be calculating wrong. The ten-year statute doesn't necessarily run from the date you recieved the loan. It runs from the date of your last fraudulent act.

Here's how that works. Let's say you got your PPP loan in April 2020. You assume the statute expires in April 2030. But then you applied for loan forgiveness in March 2021, and on that forgiveness application you overstated payroll costs or employee counts or otherwise submitted false documentation. Your last fraudulent act was March 2021. Which means the statute doesn't expire until March 2031. Most people don't realize the forgiveness application resets the clock. They calculate from the loan disbursment date, figure they've got until 2030, and then get indicted in 2029 or 2030 and can't understand how the government still has jurisdiction.

This isn't a theoretical problem. It's a trap people fall into constantly. And if you destroyed records in 2029 because you thought the statute expired in 2030, and then the government charges you in 2030 based on a 2031 statute expiration, you just committed obstruction of justice under 18 USC 1512. That's a seperate twenty-year felony. You turned one crime into two crimes because you miscalculated the timeline.

Now combine that with the fact that the government has already identified 130,000+ suspicious loans and is working through them systematically. Your not waiting to see if they'll investigate you. If your loan is on that list, they're going to investigate. The only question is when. And the further down the list you are, the worse your position gets, because by the time they get to you in 2027 or 2028 or 2029, they've prosecuted thousands of PPP fraud cases and refined there strategy. They know every defense. They've heard every explanation. They've built a playbook for exactly how to charge these cases, what evidence to gather, how to structure plea offers. Your facing a prosecution machine that's had years of practice.

The DOJ has been explicit about this. One legal analysis noted that COVID-19 related investigations and enforcement actions are "expected to continue for years to come," and that the statute of limitations extension "allows for criminal charges and civil enforcement against borrowers who defraud PPP loans until 2031." Their not hiding the timeline. If anything, there broadcasting it. The prosecutions aren't slowing down—one report described the pace as "almost daily" throughout 2025.

They Just Sent Someone to Prison for $20,835—Small Loans Aren't Safe

A lot of people assume that if there loan amount was relatively small, prosecutors won't bother. They figure the federal government has bigger fish to fry. Why would they spend resources prosecuting a $20,000 or $50,000 fraud when there are people who stole millions?

Because the amount of your loan doesn't determine whether they prosecute you. Kelton McClarrin found that out the hard way. In March 2024, a federal judge in Cincinnati sentenced him to eighteen months in prison for PPP fraud. The total amount? $20,835. He used the money for personal expenditures—specifically, jail commissary services. Not payroll. Not rent. Not any of the approved uses. Just personal spending. And for that, he got a year and a half in federal prison.

That's roughly twenty-six days in federal prison for every $1,000 he stole. Think about that ratio. If you defrauded $50,000, using that same calculus, you're looking at over three years. And these aren't theoretical sentences. Their real cases with real people serving real time in federal facilities.

Now, there is a pattern if you look at enough indictments. Defense attorneys who've reviewed hundreds of PPP fraud cases report that loans under $150,000 usually result in civil recovery only, with no criminal charges. The $150,000 to $500,000 range is a borderline zone—whether it's criminal or civil depends on aggravating factors like using stolen identities, submitting multiple applications, or engaging in money laundering. But that's not a guarantee. Kelton McClarrin's case proves that even amounts well below $150,000 can result in federal prison time if the conduct is egregious enough.

And here's the thing nobody talks about. Even if you win your case, the process is the punishment. Federal criminal defense costs anywhere from $50,000 to $300,000 depending on complexity and how far the case goes. If your charged with PPP fraud and you fight it and you WIN, you've still spent six figures defending yourself. You've lost your business. Your family's financial situation is destroyed. Your reputation is gone. Even acquittal doesn't make you whole.

So when people say "it was only $30,000, their not going to come after me," what their really saying is "I hope I'm not worth the effort." But the government has already identified 130,000 loans. Their working through them systematically. Hope isn't a strategy.

Oregon Cases: From Dentists to Tesla Stock—What Actually Happens

Andrew Lloyd, Lebanon, Oregon. He obtained $3.5 million through fraudulent PPP applications with inflated payroll figures and falsified tax documents. He bought a Tesla, a Porsche, and invested in Tesla stock. By the time federal agents seized his assets, those 15,000 Tesla shares were worth $18 million. He forfeited all of it—25 properties total, every share, all the gains. 48 months federal prison, $4 million restitution. His accomplice Russell Schort got prison time and $294,552 restitution.

Salwan Adjaj, 43, West Linn. A dentist who submitted dozens of fraudulent PPP/EIDL applications between September 2020 and May 2021. The SBA paid out more than $11.5 million. He pleaded guilty to wire fraud and aggravated identity theft. But here's the interesting part: In a separate criminal case running simultaneously, he also pleaded guilty to illegally distributing controlled substances—thousands of pills of prescription drugs and anabolic steroids—using his position as a dentist to obtain them. Two federal fraud schemes at once.

David Unitan (aka Danny Cohen), 46, Lake Oswego. Charged with aggravated identity theft, wire fraud, money laundering. Agents seized a Ford pickup and Tesla sedan as proceeds of fraudulent applications.

Since January 2021, more than fifty people have been charged in the District of Oregon for roles in COVID-19 relief fraud schemes. That's just Oregon.

What do all these cases have in common? The defendants probably thought they were going to get away with it. Lloyd had years to enjoy his Tesla and watch his stock portfolio grow before the indictment. Adjaj submitted applications for over a year before being charged. The government doesn't move fast. They move carefully. They build the case, gather documentation, interview witnesses, analyze bank records, and then—sometimes years later—they indict. By the time your charged, the case is already built.

The Proffer Trap—Why Cooperating Can Add 5 Years to Your Sentence

The FBI shows up at your business. They want to ask questions about your PPP loan. Your instinct—because you think honesty is the best policy—is to sit down and explain everything. To show them it was all a misunderstanding.

That instinct will destroy you.

Defense attorneys say the same thing: "A lot of defendants think they're being honest and cooperative. But you're giving them the exact element they need to convict you—intent." Prosecutors don't ask questions out of curiosity. They already know the answer from documents, bank records, surveillance. They want you to confirm it, or contradict it, so they can charge you with making false statements either way.

Here's how the trap works. Your attorney negotiates a proffer agreement. You sit down with prosecutors. Limited immunity—they can't use your statements directly, but they can use any leads they develop. Sounds reasonable. Except during that session, you get details wrong. You say you had twelve employees when records show nine. You say the loan was $250,000 when it was actually $280,000. You claim you didn't know about fake employee names when emails prove otherwise.

Now your facing an additional charge under 18 USC 1001—making false statements to federal investigators. Five years maximum. Per statement. You walked in facing potential fraud charges. You walked out facing fraud charges plus false statement charges because you misremembered under pressure.

One defense attorney: "Prosecutors ask questions they already know answers to. They WANT you to get it wrong so they can add 18 USC 1001 charges."

Once you've talked to federal agents without representation, those statements are locked in. Your attorney can't un-ring that bell. The Fifth Amendment protects you before you talk, not after. If you contradicted the documents, if you admitted facts that establish intent—that's the record. Your lawyer can't fix it.

Federal agents are trained to be friendly, to act like they're just trying to clear things up. But they are not on your side. Every word you say is being evaluated for whether it helps them prove intent, materiality, or false statements. Answering questions without an attorney present is how you turn a potential civil matter into a guaranteed conviction.

What the $18 Million Forfeiture Tells You About Asset Seizure

Andrew Lloyd stole $3.5 million. He bought Tesla stock. The stock went up. By the time federal agents seized his accounts, those shares were worth $18 million. The government took all of it—not just what he stole, but all the appreciation. He forfeited five times the theft amount because the market worked in his favor and then against him.

Asset forfeiture in federal fraud cases doesn't just reclaim what you took. It reclaims anything you bought with those proceeds and any gains those assets generated. If you used PPP funds to buy a house and the house appreciated $200,000, the government seizes the house including the appreciation. If you invested in stocks or crypto or anything that grew in value, they take the whole thing.

The legal theory: the government is entitled to all proceeds traceable to the crime. If you commingled fraudulent PPP money with legitimate funds and then bought something, prosecutors will argue the entire asset is forfeitable because you can't prove which dollars went were. The burden shifts to you. Good luck proving that after the fact.

Lloyd also forfeited 25 properties. Once the government identifies fraud proceeds in your accounts, everything you own becomes suspect. They freeze bank accounts, seize cars, real estate, business assets. If you can't prove a specific asset was purchased with clean money, it's gone.

For a lot of people, the forfeiture is worse than the prison sentence. You might get three or four years in federal prison, but you lose your house, retirement accounts, car, business. You come out of prison with nothing. Even if your spouse wasn't involved, if the house is in both names and you can't prove it was purchased with clean money, it's gone.

Civil asset forfeiture has a lower burden of proof than criminal prosecution. Criminal case: beyond a reasonable doubt. Civil forfeiture: preponderance of the evidence—more likely than not. So even if your acquitted of the criminal charges, you can still lose your assets in a civil forfeiture proceeding.

If You're One of the 130,000—What Happens Next

The SBA identifies your loan as problematic based on data analytics. They refer it to the FBI. Agents gather your bank records, tax returns, loan application. They interview your bank, your accountant, maybe your employees. This takes months or years. You won't know it's happening.

Then one day, either you get a target letter from the U.S. Attorney's Office, or FBI agents show up and want to talk. If you get a target letter, the case is mostly built. Your not at the beginning of the process. Your near the end.

The correct response when federal agents want to interview you: "I need to speak with my attorney first." That's it. You don't explain. You don't justify. You invoke your right to counsel and you stop talking.

A federal defense attorney can reach out to prosecutors before charges are filed. They can present evidence of good-faith belief in eligibility, reliance on professional advice, and legitimate use of funds. Sometimes prosecutors agree the case doesn't warrant criminal charges and refer it back for civil recovery. But that opportunity disappears once your indicted. And it only works if you haven't already talked to the FBI and handed them the intent element they needed.

Why You Need a Federal Defense Attorney Before the Target Letter Arrives

Federal grand juries indict in over 99% of cases. If your a target, your going to be indicted. The question is what position you'll be in when it happens.

Early representation means you won't destroy documents out of panic (obstruction—20 years). You won't talk to the FBI without counsel present (false statements—5 years per charge). You won't pressure employees to change testimony (witness tampering). People make these mistakes out of fear, and they turn one charge into five.

Early representation also gives your attorney time to find viable defenses. Maybe the payroll figures were based on projected hires you genuinely planned to make. Maybe the bank made errors in processing that undermine materiality. Maybe you relied on an accountant's advice. Your attorney needs time to build that case. If you wait until two weeks before trial, it's to late.

At Spodek Law Group, Todd Spodek and our team defend clients against federal prosecutors who have unlimited budgets and a 93% conviction rate. We know the statutes, the guidelines, the prosecutors in the District of Oregon. We know what mitigating evidence matters. And we know that waiting until the case is already built is how you guarantee the worst outcome.

If you're sitting there thinking, "This might apply to me," call us. If you got a PPP loan in 2020 or 2021 and the application wasn't entirely accurate, if you used funds for purposes that might not have been approved, if you've heard the SBA is investigating loans from your lender—call us now. The consultation is confidential. 212-300-5196.

The statute runs until 2030 or 2031. The government has 130,000 loans already flagged and they're working through them systematically. They are prosecuting loans as small as $20,000. They are seizing assets worth five times the theft amount. They're charging people with additional crimes when they cooperate without representation. And their conviction rate is over 93%.

The window hasn't closed. It's still wide open. And if you're one of the 130,000, the question isn't whether they'll get to you. It's when. And what position you'll be in when they do.