Philadelphia County PPP Loan Fraud Lawyers
You took a PPP loan in 2020. Maybe 2021. The application went through quickly - that was the whole point. The government wanted money in the hands of struggling businesses as fast as possible. Forgiveness came later. You moved on. Years passed. You assumed it was over.
It wasn't over. It was just getting started.
The federal government built a PPP prosecution machine designed to operate for a full decade - and Philadelphia County is directly in its path. Congress extended the statute of limitations to 10 years in August 2022. Retroactively. That means a 2020 loan is prosecutable until 2030. A 2021 loan until 2031. The Eastern District of Pennsylvania has a 19-agency COVID Fraud Working Group that has been operating since March 2020. They're not slowing down.
Welcome to Spodek Law Group. We handle federal PPP loan fraud defense in Philadelphia County and throughout the Eastern District of Pennsylvania. If you've received a letter from the SBA Office of Inspector General, if federal agents have contacted you, or if you're concerned about a loan you took during the pandemic - this article explains exactly what you're facing and what options actually exist.
The Prosecution Machine Is Still Running
In August 2022, President Biden signed the PPP and Bank Fraud Enforcement Harmonization Act. Most people didnt notice. What it did was extend the statute of limitations from 5 years to 10 years - and it applied retroactively to loans already issued.
That means every PPP loan from 2020 is prosecutable until 2030. Every loan from 2021 until 2031. The government gave itself a full decade to come for you.
According to Pandemic Oversight, as of December 31, 2024, the prosecution machine has produced these numbers:
- 3,096 defendants charged with pandemic relief fraud
- 2,532 defendants found guilty (82%)
- 1,741 received prison time (81% of those convicted)
- 2,008 ordered to pay restitution (94%)
IRS Criminal Investigation achieves a 98.5% conviction rate in the COVID fraud cases they prosecute. Thats not a typo. Once there involved, conviction is nearly certain.
Heres what most people dont understand about how one PPP application becomes a federal case. The DOJ doesnt charge you with "PPP fraud" - there's no such crime. Instead, they stack pre-existing fraud statutes. One application can trigger:
One application. Theoretical exposure exceeding 100 years. In practice, sentences dont reach that level - but charge stacking gives prosecutors enormous leverage in plea negotiations.
These are national numbers. But what happens in Philadelphia specifically?
Philadelphia County Is Ground Zero
The Eastern District of Pennsylvania covers Philadelphia and the surounding counties. This is one of the busiest federal districts in the country for white-collar prosecution. The COVID Fraud Working Group here combines resources from 19 federal agencies - FBI, IRS Criminal Investigation, SBA Office of Inspector General, Secret Service, Postal Inspection, and the Pennsylvania Office of Attorney General, among others.
Theyve been operating since March 2020. There building cases systematicaly through the backlog of flagged applications.
Recent Philadelphia-area PPP fraud cases:
- Tommy Hawkins (Philadelphia bank manager, October 2024): 65 months in federal prison. He was the branch manager at a national bank's Conshohocken location. Recruited businesses with minimal operations to open accounts and submit fraudulent PPP applications. Approximately $5 million across 38 loans.
- Alhaji Kundu Aly (Chester, PA, April 2025): 78 months in federal prison. Organized a large-scale scheme in 2021. Ordered to pay $3.48 million in restitution to the SBA and PPP lenders.
- Darryl Duanne Young (Kingston, PA, September 2024): 78 months in federal prison plus $5.28 million restitution. Submitted fraudulent applications with falsified tax documents and bank statements. $4.8 million fraud scheme.
- Francis J. Battista (Aston, PA): Facing trial for allegedly seeking $10 million through 19 fraudulent applications. Used funds for a Range Rover, real estate, stock trading. Government has seized $6.3 million through forfeiture proceedings.
These arent national stories. These are Pennsylvania residents who went to federal prison in 2024 and 2025. The 19-agency task force is working. Cases are moving through the system. A Cincinnati defendant got 18 months for $21,000 in PPP fraud. The amount dosent protect you.
But Pennsylvania has a reputation for leniency. You've probably heard about the departure rates. Heres what that actualy means.
The Leverage Window Nobody Tells You About
Pennsylvania federal courts grant downward departures at a 51% rate. Thats more than double the 23% national average. Sounds like good news.
Its not what you think.
A downward departure gets you from 37 months to 24 months. Not from prison to probation. The "leniency" reduces your sentence. It rarely eliminates incarceration entirely. And that 51% rate only applies to defendants who navigate the system correctly from the beginning. Most people destroy there leverage before they even know it exists.
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, three outcomes are possible:
- Case closed - OIG accepts your explanation
- Civil recovery - repayment plus fine, no criminal conviction
- Criminal referral - FBI takes over, prosecution begins
The window is when civil resolution is still on the table. Once its referred to the FBI, the options narrow dramatically.
But heres the trap most people fall into.
Some people panic. They decide to voluntarily repay the loan, thinking it will make the problem dissapear. The DOJ has explicitly stated that voluntary repayment can be used as evidence of consciousness of guilt. Returning the money doesnt make it go away - it can actualy strengthen the governments case against you.
Others talk to investigators without counsel, thinking cooperation will help. There have been several recent cases were people who talked to federal agents without a lawyer ended up being charged with obstruction or making false statements - in addition to the underlying PPP fraud. The agents seem friendly. Cooperative. Their not on your side.
The timing matters enormously. Whether to repay, when to repay, how to structure any resolution, whether to engage with investigators at all - these decisions require counsel who understands how federal prosecutors in EDPA actually operate. The 51% departure rate exists because skilled defense attorneys know how to position clients correctly. It doesn't exist for people who try to handle this themselves.
What You Need to Do Now
The single most important rule:
Never discuss a PPP matter with federal agents without counsel present.
This sounds obvious. But it keeps happening. The agents show up at your business or your home. They're calm, professional. They say they just want to "clarify some information." They dont read you Miranda rights because you're not under arrest. Everything you say goes into a report. And if you get a single detail wrong - even a mistake, even an honest confusion about dates or numbers - that becomes a false statements charge.
Todd Spodek has handled PPP fraud cases in the Eastern District of Pennsylvania. He understands the difference between OIG-stage investigations where civil resolution may still be possible and FBI-stage investigations where criminal defense is the priority. He knows when the 51% departure rate applies and what it takes to get there.
If your under investigation or concerned you might be:
- Dont destroy any documents. Document destruction can become a separate obstruction charge.
- Dont discuss the matter with others who may be involved. Those conversations can be used against everyone.
- Dont make voluntary payments to the SBA without counsel. This can become consciousness of guilt evidence.
- Contact a federal defense attorney immediately. The earlier you act, the more options exist.
If your in Philadelphia County - or anywhere in the Eastern District of Pennsylvania - and your facing a PPP loan fraud investigation, Spodek Law Group can help you understand where you stand.
The consultation is free. Theirs 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 are playing out in EDPA right now?
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 to build cases. The prosecution machine is still running. But the earlier you have counsel, the more leverage exists.
Were here when you need us.
