Phoenix PPP Loan Fraud Lawyers
You took out a PPP loan in 2020. Maybe 2021. The government was desperate to get money out the door, and you needed help keeping your business alive. You filled out the application, you got approved, the funds hit your account. Life went on. Years passed. You figured - reasonably - that the government had moved on to other priorities.
You figured wrong.
The federal government turned PPP fraud prosecution into an assembly line. And Phoenix is sitting directly in the path of that machine. The District of Arizona has been handing out sentences that would make your head spin - 121 months for one defendant, 120 months for another. These aren't people who stole hundreds of millions. The 10-year statute of limitations means that 2020 PPP loan you barely remember is prosecutable until 2030. Maybe 2032 if you submitted a forgiveness application.
Welcome to Spodek Law Group. We handle federal PPP loan fraud defense in Phoenix and throughout the District of Arizona. If you've received a letter from the SBA Office of Inspector General, if federal agents have contacted you, or if you're just lying awake at night worrying about that application you submitted years ago - this article explains what you're actually facing. Not what you hope is true. What's actually happening in federal court.
The 10-Year Clock Is Ticking
Most people assume the statute of limitations has run. That after five years, the government loses its ability to prosecute.
Most people are wrong.
In August 2022, Congress passed the PPP and Bank Fraud Enforcement Harmonization Act. What it actualy did was extend the statute of limitations from 5 years to 10 years - retroactively. That means a PPP loan from 2020 is prosecutable until 2030. A loan from 2021 until 2031. The government gave itself a full decade to come for you.
And in Arizona, that's alot of potential targets. The state recieved over 120,000 PPP loans worth $14.7 billion. Another 81,000 EIDL loans totaling $7.6 billion. The SBA Inspector General has estimated that over $200 billion nationally went to potentially fraudulent applications. The agencies are nowhere close to done investigating.
Heres the part that catches people off guard. The 10-year clock doesn't necessarily start from when you got the loan. It starts from your last fraudulent act. That forgiveness application you submitted in 2022? It may have reset your clock entirely. Pushing your exposure window to 2032.
The COVID-19 Fraud Enforcement Task Force coordinates investigations across the FBI, IRS Criminal Investigation, Homeland Security Investigations, and SBA OIG. They have strike forces dedicated specifically to pandemic fraud. In Phoenix, HSI and FBI work together on these cases. The same agencies that helped process your loan application are now the ones building cases against you.
Every PPP loan issued in Arizona is now subject to prosecution for a full decade from the date of the last related act.
What Phoenix Sentences Actually Look Like
You've probly told yourself the sentences can't be that bad. People made mistakes during a chaotic time. Judges understand that. Federal prison is for violent criminals and billionaire fraudsters. Not someone who fudged payroll numbers on a PPP application.
Let me introduce you to Sean Swaringer of Peoria.
Swaringer submitted four fraudulent PPP loan applications for two entities - Cryotherapy for Veterans and Cryoworld Therapy LLC. He obtained more than $1.5 million. He also recruited over ten other people to submit fraudulent applications and took kickbacks from there loans.
His sentence: 121 months.
Thats over ten years in federal prison. For PPP fraud. With a guilty plea.
Kimberly Coleman of Mesa worked with her husband Jason to submit aproximately two dozen fraudulent PPP applications. They were successful on at least ten, obtaining more than $13 million. They bought luxury vehicles, real estate, jewelry, vacations.
Her sentence: 120 months. Jason got 60 months.
Willie Mitchell of Phoenix - known as Blu Mitchell - obtained seven fraudulent PPP loans totaling $9.47 million. He purchased vehicles, multiple properties, and vacations.
His sentence: 97 months.
These arent hypothetical worst-case scenarios. These are actual sentences handed down by federal judges in the District of Arizona. Judge G. Murray Snow. Judge Steven P. Logan. Judge Susan M. Brnovich. Real judges. Real courtrooms. Real prison time.
And if you think your position protects you, consider Toni Richardson.
Richardson was a Phoenix Police Department officer. She submitted a PPP application claiming her business - The Lotto Club - had 85 employees and monthly payroll of $500,000. In reality, she was the sole owner with zero employees. She obtained $1.27 million.
Her sentence: 15 months federal prison. $1 million restitution. And she was a cop.
If they'll prosecute a police officer, there not going to hesitate over you.
The Federal Conviction Machine
OK so maybe your thinking those Phoenix cases involved millions of dollars. Organized rings. Conspiracy charges. Your situation is different - you submitted one application, maybe stretched the truth on payroll numbers, the amount was small. Surely the federal government has bigger fish to fry.
Heres where that thinking falls apart.
According to Pandemic Oversight, as of December 31, 2024:
- 3,096 defendants have been charged with pandemic relief fraud
- 2,532 defendants have been found guilty (82% conviction rate)
- 1,741 received prison time (81% of those convicted)
- 2,008 were ordered to pay restitution (94%)
Eighty-one percent of convicted defendants got prison. Not probation. Not home confinement. Prison.
And the amount dosent protect you the way you think it does.
A Cincinnati defendant got 18 months in federal prison for $21,000 in PPP fraud. March 2025. Twenty-one thousand dollars. A year and a half in federal prison.
The government isn't looking at this as proportional justice. There looking at it as deterrence. They want headlines. They want other people who committed PPP fraud to see these sentences and worry. The amount matters for guideline calculations, but federal judges in 2025 are including prison time in nearly every PPP sentencing regardless of the amount involved.
And one application can become multiple charges. The PPP itself dosent have criminal provisions - the CARES Act isn't a penal statute. So how are people going to federal prison?
The DOJ uses pre-existing fraud statutes:
One PPP application can trigger five seperate federal charges. Theoretical exposure exceeding 100 years. In practice, sentences dont reach that level. But charge stacking gives prosecutors enormous leverage in plea negotiations.
The Window That Most People Miss
Heres something that changes the calculation entirely.
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, there is leverage that completley disappears once criminal charges are filed.
During the OIG review stage, a defense attorney may be able to negotiate a civil disposition. Repayment plus a fine. Maybe a False Claims Act settlement - which involves paying damages, but not going to federal prison. The government actually offers incentives to resolve cases civilly because it saves them the cost of criminal prosecution.
But most people dont know this window exists. And by the time there sitting across from FBI agents, the window has closed.
The trap most people fall into:
Panicking, some people decide to voluntarily repay the loan thinking it will make the problem go away. The DOJ has explicitly stated that voluntary repayment can be used as evidence of consciousness of guilt. Returning the money dosent make it go away - it can actually strengthen the government's case against you.
The intuitive response is wrong.
If your under investigation or worried you might be:
- Do not talk to federal agents without an attorney present. Period. Recent cases show people who talked without counsel ended up charged with obstruction or false statements on top of the underlying fraud.
- Do not destroy any documents. Document destruction is a seperate federal charge.
- Do not make voluntary payments to the SBA without legal guidance. This can be used against you.
- Do not discuss the matter with anyone else who may have been involved. Those conversations can become evidence.
Todd Spodek has handled PPP fraud cases in the District of Arizona. 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. The strategy depends entirely on where you are in that timeline.
When Your Ready
If your in Phoenix - or anywhere in Arizona - and your facing a PPP loan fraud investigation, Spodek Law Group can help you understand were you actually stand. Not optimistic guesses. An honest assessment based on the facts of your situation and how these cases are actually playing out in federal court.
The consultation is free. Theirs no obligation.
What you'll get is clarity. Is this still at the OIG stage where civil resolution might be possible? Has it been referred to FBI or IRS Criminal Investigation? What does the evidence look like? What are realistic outcomes - not best-case fantasies, but actual possibilities based on how Judge Snow, Judge Logan, and Judge Brnovich have been sentencing these cases?
Call us at 212-300-5196. The statute of limitations runs until 2030 or later depending on when you got the loan and when you last touched it. The government has time. But once they move, things happen fast. The earlier you have counsel, the more options exist.
Sean Swaringer probly wishes he had called a lawyer sooner.
Were here when you need us.
