FEDERAL CRIMINAL LAWYERS

Pittsburgh PPP Loan Fraud Lawyers

Pittsburgh EIDL Loan Fraud Defense Lawyers – Federal Criminal Investigation

If you’re under EIDL investigation in Pittsburgh, it’s important to realize that, you are facing federal criminal charges, and the United States Attorney’s Office for the Western District of Pennsylvania has already been building their case. This is serious notification that federal prosecutors have your application, bank records, tax returns, they’ve been comparing your stated revenues to what you actually reported to IRS. The FBI Pittsburgh Field Office executes search warrants at businesses, homes, anywhere they believe evidence is located.

Maybe $150,000, maybe $500,000. Now three or four years later they’re questioning everything. The Western District prosecutors, they don’t mess around with EIDL fraud, they’ve been charging cases aggressively since 2023. This is is serious because you never intended fraud, you were trying to save your business during unprecedented crisis.

Understanding EIDL Fraud Prosecutions in Pittsburgh

It’s important to realize that, federal agents already have months of investigation before contacting you. Patricia White got sentenced January 2024 to 29 months federal prison, ordered to pay $510,000 restitution, she submitted EIDL applications with inflated gross revenue figures for multiple retail businesses in Pittsburgh. Used loan proceeds for personal expenses including luxury purchases, travel, real estate investments. This can be what prosecutors focus on – difference between stated revenues and tax returns.

The federal system can be different from state court, and in this situation, you’re facing charges under 18 USC § 1344 (bank fraud), 18 USC § 1343 (wire fraud), 18 USC § 1001 (false statements). Bank fraud carries up to 30 years, wire fraud up to 20 years or 30 if affects financial institution, false statements up to 5 years. This is serious, really serious, and it’s crucial to understand these are theoretical maximums prosecutors use for leverage.

Western District prosecutors, they charge cases based solely on discrepancies between loan applications and tax returns, they don’t need sophisticated criminal schemes. Michael Harris got 21 months prison April 2024, 3 years supervised release for $375,000 EIDL fraud. He overstated 2019 revenues and altered supporting tax documents. First-time offender, full cooperation, still got prison time. This can be the reality even with cooperation.

Why Revenue Discrepancies Don’t Automatically Mean Fraud

Your EIDL application asked for “gross revenues” for twelve months ending January 31, 2020, and it’s important to note that, SBA didn’t clearly define what that meant. Does it include returned merchandise, refunds, sales tax collected, non-operating income? Different accountants calculate revenues differently, and this can be crucial for your defense.

Maybe you completed application from memory without tax return available. Maybe included projections for January 2020 that didn’t materialize. Maybe misunderstood date range and included some 2020 revenue. Maybe your accountant used accrual method on tax return but you calculated cash basis.

In this situation, prosecutors treat any discrepancy as fraud evidence. But you stated $500,000 gross revenues, tax return shows $450,000 gross receipts, that doesn’t prove you lied. It proves you used different calculation method or made honest mistake under pandemic pressure. None of these involve criminal intent, which prosecutors must prove beyond reasonable doubt.

The Intent Element They Must Prove

It’s crucial to understand that, each fraud charge requires prosecutors prove you acted “knowingly and willfully.” Good faith belief in accuracy of your statements, even if wrong, negates intent element. If you genuinely believed revenue calculation was accurate based on available information, that’s defense against fraud charges.

SBA approved your loan based on information you provided, which suggests it was at least facially reasonable. If stated revenues were obviously fraudulent – claiming $5 million for one-person consulting business – SBA would have flagged for review. The fact loan was approved without additional inquiry undermines government’s claim fraud was obvious.

Oh, I should mention the investigation timeline again. Month one through two, they’re reviewing documents – comparing EIDL application to actual business records. Did business really exist in 2019? Was revenue accurate? Did you actually have economic injury from COVID? If 2020 revenue went up, that’s problem for prosecutors.

Constitutional Defenses Against EIDL Charges

Your Fifth Amendment due process rights require criminal statutes provide fair notice of prohibited conduct. When EIDL application and SBA guidance were vague or ambiguous – as they were during emergency rollout – ambiguity must be construed in your favor under rule of lenity. This can be powerful defense.

The Sixth Amendment guarantees right to counsel, and regardless of what agents tell you, you need attorney before any questioning. Federal agents are skilled at eliciting incriminating statements during “voluntary” interviews. Anything you say gets memorialized in report, used against you at trial. This is formal protection you must invoke immediately.

We take comprehensive approach challenging every aspect of government’s case. Fourth Amendment challenges if FBI searched without warrant or exceeded scope. Fifth Amendment if interrogated without Miranda warnings. Insufficient evidence defense if government can’t prove intent beyond reasonable doubt. Todd Spodek has over 40 years combined experience defending federal fraud nationwide andcontext understands how different districts prosecute differently.

Sentencing Reality in Western District

Sentencing guidelines base punishment primarily on loss amount – the EIDL loan you received. A $200,000 loan produces base offense level translating to 24-30 months before adjustments. $500,000 loan produces 33-41 months.

The Trial Penalty Problem

It’s important to realize that, defendants who plead guilty receive three-level reduction for acceptance of responsibility. This can reduce 30-month sentence to 18 months. Go to trial and lose, you forfeit that reduction plus prosecutors recommend high-end sentences. The difference can be 50-100% longer sentence for exercising constitutional right to trial.

Restitution is mandatory regardless. You’ll be ordered to repay full EIDL loan amount whether you spent it on legitimate business expenses or personal expenses, whether business survived or failed. This obligation doesn’t disappear, survives bankruptcy, government enforces through wage garnishments, tax refund seizures, property liens for decades. Period.

In this situation, about 90% of federal defendants plead guilty because trial penalty is so severe. First offer might be plead to two counts, stipulate $500,000 loss, guideline calls for three years. As trial approaches and attorney identifies weaknesses, offer might improve to one count, lower loss calculation, two years guideline.

Recent Pittsburgh EIDL Cases Show Pattern

The Western District has been prosecuting EIDL cases aggressively since 2023, treating pandemic loan applications like sophisticated fraud schemes. They don’t distinguish between fraud rings and desperate business owners who made honest errors. Patricia White case – 29 months for $510,000. Michael Harris – 21 months for $375,000. Both first-time offenders.

It’s crucial to act immediately if you’re under investigation. Don’t talk to federal investigators without lawyer present. If FBI agent, SBA investigator, or IRS criminal division contacts you, say only: “I need to speak with attorney before discussing this.” End conversation immediately.

Don’t create new documents or destroy existing ones. Creating false documents after investigation begins is obstruction of justice, separate federal felony carrying up to 20 years. Destroying documents is also obstruction, prosecutors use it to argue consciousness of guilt. Preserve everything – bank statements, tax returns, EIDL application, SBA correspondence.

What Happens During Investigation Phase

Phase one is document review and comparison. SBA audits flag inconsistencies between application and tax returns. FBI opens investigation, subpoenas documents from bank and accountant, interviews employees. This lasts months, sometimes over year. You might not know you’re under investigation until agents contact you or you receive target letter.

It’s important to note that, not every investigation becomes criminal case. Civil cases involve repayment demands but no criminal charges – for smaller discrepancies, honest errors, confusion about “economic injury” during unprecedented pandemic. If you miscalculated revenue, weren’t sure about employee counts, used funds for expenses you thought were business-related, that can argue for civil resolution.

Criminal cases involve intentional fraud – claiming business that didn’t exist, fabricating tax returns, listing fake employees, using funds for obviously personal expenses. But prosecutors in Pittsburgh have been charging cases that fall between these extremes, treating honest mistakes as criminal fraud.

Frequently Asked Questions

What are the penalties for EIDL loan fraud?

EIDL fraud penalties can be severe with bank fraud carrying up to 30 years federal prison, wire fraud up to 20 or 30 years if affects financial institution, and false statements up to 5 years. It’s important to realize that, actual sentences are much lower based on sentencing guidelines. Patricia White got 29 months for $510,000 fraud in Pittsburgh January 2024, Michael Harris got 21 months for $375,000 in April 2024. First-time offenders with loans under $200,000 might get 12-18 months or probation with cooperation. Restitution is always mandatory requiring full repayment of loan amount regardless of how funds were used. This can be lifetime obligation enforced through wage garnishments and asset seizures.

Can I be charged with EIDL fraud for honest mistakes?

Prosecutors must prove you “knowingly and willfully” made false statements to charge EIDL fraud, not just that you made errors. Good faith mistakes based on confusing SBA guidance, estimating revenues without exact records available, misunderstanding what “gross revenues” meant – these aren’t crimes. It’s crucial to understand that, discrepancy between application and tax return doesn’t automatically prove fraud. Different calculation methods, timing differences, honest errors under pandemic pressure can explain discrepancies without criminal intent. But Western District prosecutors have been aggressive, charging cases based solely on application-tax return differences, forcing defendants to prove good faith at trial or plead guilty to avoid risk.

What should I do if contacted about EIDL investigation?

If FBI, SBA OIG, or IRS criminal division contacts you about EIDL loan, don’t talk without attorney present. Say only “I need to speak with attorney before discussing this” and end conversation. This is crucial because agents are skilled at getting incriminating statements during “voluntary” interviews that become evidence against you. Don’t create new documents trying to support your application or destroy existing records – both are obstruction of justice carrying separate federal charges. Gather all documents related to your EIDL loan but don’t alter anything. Contact federal defense attorney immediately as early intervention can be difference between civil resolution and criminal prosecution. The window for favorable resolution exists but closes quickly once formal charges filed.

Why You Need Federal Defense Attorney Now

The earlier attorney gets involved, more options you have. If you’re in investigation phase – received SBA letter, grand jury subpoena, agent phone call – we may respond in way that avoids criminal charges entirely. If received target letter from U.S. Attorney’s Office, we can present evidence showing you lack criminal intent or prosecution isn’t warranted.

Todd Spodek and Spodek Law Group have over 40 years combined experience defending federal fraud cases nationwide. We’ve handled high-profile cases where media attention ran against clients but constitutional principles required vigorous defense. We understand EIDL regulations, know how prosecutors calculate loss amounts, can identify weaknesses in government’s case.

This is too important to handle alone. Western District prosecutors have unlimited resources, treat EIDL applications like criminal schemes, seek prison sentences for first-time offenders. You need someone who knows this system, these prosecutors, can protect your rights infront of federal judge.

It’s important to realize that, decisions you make today determine your future. Early intervention can mean difference between civil resolution and criminal prosecution, between probation and prison, between manageable restitution and lifetime debt. The government is building case against you right now. Don’t wait, don’t hope it goes away.

Call 212-300-5196 immediately if you’re under EIDL investigation in Pittsburgh. We’re available 24/7 because federal investigations don’t wait for business hours. Your freedom, finances, and future are at stake. This is your chance to take control before it’s too late.