San Antonio PPP Loan Fraud Lawyers

You think your PPP exposure is determined by how much you took. You obtained $500,000. Someone else obtained $5 million. They're in more trouble than you are. The math seems simple. More fraud equals more punishment.

That's not how San Antonio works.

Welcome to Spodek Law Group. Our goal is to tell you what other websites won't: in the Western District of Texas, your sentence isn't determined by how much you stole - it's determined by what you BOUGHT. Michael Fullerton obtained $3 million in fraudulent PPP funds. He was sentenced to 286 months - that's nearly 24 years in federal prison. But he didn't get 24 years for the fraud alone. He got 24 years because every purchase created a new crime.

The fraud was the entry point. The spending was the trap.

How Spending Becomes Sentencing

Most people think PPP fraud is a single crime. You applied. You lied. You received money you shouldn't have. One crime. One sentence.

Thats not how federal prosecutors in San Antonio see it.

Every dollar you spent after receiving PPP funds becomes a separate analysis. Did you spend it on payroll like you were supposed to? That's the only clean exit. Did you spend it on a Range Rover? That's money laundering. Did you use fake employee names on the application? That's aggravated identity theft. Did you invest it in a business venture? That's fraud proceeds being laundered through additional transactions.

Heres how the math actually works. The base offense level for wire fraud depends on the loss amount. A $3 million fraud puts you in the range of 8-10 years before enhancements. But add aggravated identity theft - which carries a MANDATORY 2-year consecutive sentence per count - and suddenly you're at 12-14 years. Add money laundering charges because you moved the funds to different accounts, and you're at 16-18 years. Add enhancements for sophistication, for using financial institutions, for number of victims - you're at 24 years.

The federal sentencing guidelines are designed to punish complexity. Every additional charge category increases your offense level. Every enhancement adds months. Every aggravating factor compounds the calculation. Prosecutors in San Antonio understand this math perfectly - and they use spending patterns to maximize every variable in the equation.

The Fullertons didnt just commit fraud. They committed fraud and then spent the money in ways that created new charges with each purchase. That's the trap. The spending pattern becomes the sentence.

What this means practicaly is devastating. If you received PPP funds and spent them on anything other than payroll, you've created spending evidence that prosecutors will use to add charges. Every bank statement becomes an exhibit. Every receipt becomes a count. Every purchase becomes proof of intent.

Every dollar you spent on non-payroll items is now a separate criminal charge. The prosecutors in San Antonio aren't just counting how much you took. They're counting how many times you spent it on the wrong things.

The Fullerton Trap: From $3 Million to 286 Months

Let me show you exactly how spending turns fraud into decades.

Michael and Tiffany Fullerton of Georgetown submitted six fraudulent PPP loan applications totaling more then $3.5 million. Five applications were funded, giving them approximately $3 million in PPP proceeds. So far, this sounds like a fraud case worth maybe 5-7 years under normal sentencing guidelines.

But here's were the Fullertons made it catastrophic.

They used that $3 million to invest in a business in Oklahoma. Not just any business - a marijuana grow operation and dispensary. Plus a bar and grill. Plus an auto/boat repair shop. They also bought a motor home. Luxury watches. A boat. The spending was flagrant, documented, and created layer after layer of additional criminal exposure.

OK so why does the marijuana angle matter so much? Becuase PPP funds are FEDERAL money. And marijuana - regardless of state law - remains illegal under federal law. Using federal funds to invest in a federally illegal enterprise creates federal-on-federal crime. Its not just fraud anymore. Its money laundering. Its potentially drug conspiracy adjacent. Its every enhancement prosecutors could stack.

The Fullertons thought they were being entrepreneurial. Oklahoma had recently legalized medical marijuana. The industry was booming. They saw opportunity. What they didnt see was that federal prosecutors would view their investment as proof of sophisticated criminal intent - taking federal pandemic relief money and deliberately funneling it into federally prohibited activity. That perspective transformed their case from a fraud prosecution into a statement prosecution.

The result? Michael Fullerton recieved 286 months in federal prison. Tiffany Fullerton recieved 108 months. Combined: 32 years for one household. Restitution: $3,027,526.11 that neither of them can ever discharge in bankruptcy.

Heres the part that makes this especialy brutal. Michael pleaded guilty to 11 counts, including bank fraud, wire fraud, and aggravated identity theft. Each count of aggravated identity theft carries a mandatory 2-year sentence that runs CONSECUTIVE to other sentences - not concurrent. Those mandatory minimums cant be reduced through departures or cooperation. They're locked in the moment you're charged.

The Fullertons didnt just commit $3 million fraud. They committed $3 million fraud and then created a roadmap of criminal spending that prosecutors followed straight to a 32-year sentence.

Heres something practitioners understand that the public dosent. The fraud amount establishes the floor of your exposure. The spending pattern establishes the ceiling. Most defendants focus on the fraud amount. Smart defendants worry about the spending evidence.

The Marijuana Problem

You might think that investing in marijuana is smart business. Its legal in many states. The industry is growing. Lots of people are making money.

None of that matters when you use federal PPP funds.

Under federal law, marijuana remains a Schedule I controlled substance. The PPP program was a FEDERAL program. When you take federal pandemic relief funds and invest them in a federally illegal enterprise, you create a perfect storm of criminal exposure that prosecutors in San Antonio have shown they will exploit to the maximum.

The Fullertons thought they were being entrepreneurial. They saw an opportunity in Oklahoma's medical marijuana market. They had capital - $3 million in PPP funds. They invested.

What they actualy did was create documented evidence of using federal funds for a federally prohibited purpose. The money laundering charges almost write themselves. The spending pattern shows intentional movement of fraud proceeds into illegal enterprise. The sophistication enhancement applies because they structured an investment across multiple businesses.

Heres why this matters even if you didn't invest in marijuana. The principle is the same for ANY spending that prosecutors can characterize as money laundering. Did you buy real estate? That's a transaction designed to conceal the origins of fraud proceeds. Did you invest in stocks? That's converting fraud proceeds into other assets. Did you pay off personal debts? That's commingling fraud proceeds with legitimate finances.

The 10-year statute of limitations created by the PPP and Bank Fraud Enforcement Harmonization Act of 2022 means prosecutors have time to trace every spending decision you made. Traditional fraud has a 5-year clock. PPP fraud has 10 years. If you obtained funds in April 2020, your exposed until April 2030. If you obtained forgiveness in 2022, the clock starts from forgiveness - exposure until 2032. Prosecutors arent rushing. They're building comprehensive spending analyses that will drive charge decisions years from now.

The marijuana angle just makes everything worse becuase it adds federal drug law implications to federal fraud implications. But any spending pattern that moves PPP funds away from payroll purposes becomes evidence prosecutors can use to add charges.

Think about what this means for your situation. Every purchase you made with PPP funds is sitting in bank records right now. Prosecutors have subpoena power to obtain those records. They will trace every dollar. They will categorize every expense. They will determine which purchases create which charges. And then they will build a sentencing recommendation that reflects not just the fraud, but every questionable spending decision you made after the fraud.

The fraud was the entry point. The spending was the trap. In San Antonio, the trap has teeth.

What San Antonio Sentences Actually Look Like

Let me show you whats actualy happening in the Western District of Texas right now. Not guidelines. Not hypotheticals. Real sentences from real cases.

Michael Fullerton - Georgetown. $3 million PPP fraud. Spent on marijuana business, bar, boat, watches. Sentence: 286 months (nearly 24 years). Pleaded guilty to 11 counts including aggravated identity theft. Restitution: $3,027,526.11.

Tiffany Fullerton - Georgetown. Same scheme as husband. Sentence: 108 months (9 years). Convicted at trial on conspiracy to commit bank fraud and money laundering. Combined with husband: 32 years for one household.

Dhruv Rajeshbhai Mangukiya - Austin. Indian national. Conspiracy to commit wire fraud. Sentence: 97 months (over 8 years). Restitution: $2,515,780.

Kishan Rajeshkumar Patel - Austin. On student visa. Sentence: 63 months (over 5 years). Immigration consequences on top of prison time.

Nicholas Keith Bonneville - $575,450 wire fraud. Sentence: 37 months (over 3 years). Restitution: $575,450.30.

Christopher James Phillips - Schertz. Former FBI employee. $37,500 PPP fraud. Used FBI credentials on application. Sentence: 3 months home confinement + 5 years probation. Restitution: $39,771.

Heres the pattern you should notice. The sentences range from 3 months home confinement to 286 months prison. Thats a spread of nearly 24 years for the same basic crime. What explains the difference? Partly the fraud amount. But mostly the charges - which are driven by spending patterns.

Phillips got home confinement becuase his fraud was small and his spending was limited - trading account, car payment, mortgage. Bad judgment, but not the kind of spending that creates additional charge categories.

Fullerton got 286 months becuase his spending created aggravated identity theft charges (fake employees), money laundering charges (moving funds to new ventures), and federal-on-federal exposure (marijuana investment). The spending multiplied the charges. The charges multiplied the sentence.

And look at the immigration angle. Kishan Patel was on a student visa. His 63-month sentence is just the beginning. After prison, he faces deportation and permanent bars from ever returning to the United States. For immigrants, PPP fraud dosent just mean prison - it means exile.

Dhruv Mangukiya was an Indian national living in the Austin area. His 97-month sentence - over 8 years in federal prison - will be followed by removal proceedings. Everything he built in America - relationships, career, community - ends when his sentence begins. And the $2.5 million restitution follows him even after deportation. Federal judgments are enforceable internationally. The debt never disappears.

The restitution numbers are permanant. Dhruv Mangukiya owes $2.5 million that he cant discharge in bankruptcy. He'll be paying it back for the rest of his life. Wages garnished. Tax refunds intercepted. Assets subject to seizure. The sentence dosent end when prison ends.

The Identity Theft Enhancement

Heres were most defendants make the mistake that costs them years.

When you submitted your PPP application, you listed employees. Maybe they were real employees who weren't actualy on payroll. Maybe they were names you invented. Maybe they were real people who didn't know they were listed. Each of those scenarios creates different exposure.

If you listed real people who didn't authorize it - even family members, even friends - you may have committed aggravated identity theft under 18 U.S.C. § 1028A. Each count carries a MANDATORY 2-year sentence that runs CONSECUTIVE to other sentences.

Heres what "mandatory consecutive" means in practice. Your fraud sentence might be 60 months. Add one count of aggravated identity theft, and you're at 84 months. Add two counts, and you're at 108 months. The identity theft time stacks on top of everything else and cannot be reduced through any sentencing mechanism.

Michael Fullerton pleaded guilty to aggravated identity theft charges. Those consecutive sentences are part of why his 286-month sentence is so extreme. The fraud created the base sentence. The identity theft created the mandatory additions. Together, they created nearly a quarter century in federal prison.

Think about your own application. How many employees did you list? Were all of them real people with real authorization to be listed? Did you use Social Security numbers that belonged to others? Each unauthorized use of another person's identifying information is potentialy a separate count of aggravated identity theft - with a mandatory 2-year consecutive enhancement.

Practitioners understand that aggravated identity theft charges transform PPP cases from manageable to catastrophic. A 5-year fraud sentence becomes a 7-year sentence with one count. It becomes a 9-year sentence with two counts. The multiplication effect is brutal and unavoidable once charged.

The Western District of Texas prosecutors are known for charging aggravated identity theft aggressively in PPP cases. Other districts sometimes decline to add these charges when the identity theft was incidental to the fraud. San Antonio adds them. Every unauthorized use of identifying information becomes a charging decision that adds 24 months to your exposure. The difference between districts on this single charge category can be the difference between 5 years and 10 years.

Why Timing Matters in the Western District

The difference between Christopher Phillips's 3 months and Michael Fullerton's 286 months isn't just about fraud amounts or spending patterns. Its also about choices.

Phillips cooperated. He pleaded guilty to one count of wire fraud. He accepted responsibility. He didnt force prosecutors to prove additional charges at trial.

Tiffany Fullerton went to trial. She was convicted on conspiracy to commit bank fraud AND money laundering. Her husband pleaded guilty but to 11 counts, including aggravated identity theft. Neither outcome was good, but trial made everything worse for Tiffany.

Heres how cooperation credit works in the Western District. Pre-indictment cooperation - coming forward before your charged - can affect which charges prosecutors decide to file. If you've spent PPP funds on questionable purchases, early cooperation might convince prosecutors to charge wire fraud without stacking money laundering, aggravated identity theft, and every other enhancement they could find.

Post-indictment cooperation is worth less. Prosecutors have already decided which charges to file. Your guilty plea helps, but it dosent undo the charges. You're negotiating from a weaker position.

Consider the strategic difference. Pre-indictment, a skilled defense attorney can sometimes convince prosecutors that aggravated identity theft charges aren't warranted - that the employees listed were actually authorized, that the identifying information was used with consent. Post-indictment, those charges are already filed. The best outcome is pleading guilty to fewer counts in exchange for dropping others. But you're still facing mandatory consecutive time for whatever identity theft counts remain.

The cooperation window in the Western District closes faster than in other jurisdictions. U.S. Attorney Jaime Esparza has made clear that his office pursues PPP fraud aggressively. Once an investigation reaches charging decision stage, prosecutors have already analyzed your spending pattern and determined which charges to file. Early intervention can influence that analysis. Late intervention cant.

Think about what this means practicaly. Right now, your spending pattern is sitting in bank records. Every purchase you made is documented. Prosecutors can access those records whenever they want. The question isnt wheather they'll find questionable spending - its wheather you'll have positioned yourself correctly before they charge you based on what they find.

Someone in your network may already be cooperating. Your accountant. Your loan preparer. A co-applicant. Any of them could be providing information about your application and your spending right now. Every day you wait, prosecutors learn more while your leverage decreases.

At Spodek Law Group, Todd Spodek has handled hundreds of federal fraud cases. The clients who call before the subpoena have options. Voluntary disclosure. Cooperation agreements. Strategic positioning on which charges get filed. The clients who call after indictment are fighting for survival against charges already locked in.

Call 212-300-5196 before your spending pattern becomes your sentence. Not becuase we're trying to scare you into hiring a lawyer. Becuase in San Antonio, with spending-based charge stacking and mandatory consecutive sentences for identity theft, the difference between early action and late action can be 20 years of your life.

Spodek Law Group. The Woolworth Building, 233 Broadway Suite 710, New York. We put this information on our website becuase most people have no idea that their spending pattern - not their fraud amount - determines their sentence in the Western District of Texas. Our goal isnt to frighten you. Its to make sure you understand that prosecutors here dont just count dollars. They count purchases. And each purchase can become a charge.

The Western District of Texas has shown that PPP fraud prosecution isnt about recovering federal funds. Its about making examples. Michael Fullerton will spend nearly a quarter century in federal prison. The message is clear: if you took PPP money and spent it wrong, the system will find you, analyze every purchase, and build a sentence that reflects not just what you took - but everything you did with it afterward.

In San Antonio, the fraud is the entry point. The spending is the trap.