San Diego County PPP Loan Fraud Lawyers
You got a PPP loan in 2020. Maybe 2021. Everyone in San Diego was doing it - the government practically begged businesses to take the money during the shutdown. You filled out the application, you got approved, the funds hit your account. Maybe you got forgiveness. Years passed. You stopped thinking about it. You convinced yourself the government had moved on to bigger problems.
A San Diego restaurateur who owned Streetcar Merchants in North Park just got 42 months in federal prison. April 2025.
The federal government built a prosecution assembly line for PPP fraud - and San Diego County is feeding it. The Southern District of California has jurisdiction over San Diego and Imperial counties, and they're handing out multi-year sentences to local business owners right now. The 10-year statute of limitations means that 2020 loan you assumed was ancient history is prosecutable until 2030. Congress extended it retroactively. The government gave itself a decade.
Welcome to Spodek Law Group. We handle federal PPP loan fraud defense in San Diego County and throughout the Southern District of California. If you're under investigation, if you've received a letter from the SBA Office of Inspector General, or if federal agents have shown up at your business - this article explains what you're actually facing and what options still exist.
The Government Has Until 2030
In August 2022, President Biden signed the PPP and Bank Fraud Enforcement Harmonization Act. Most people missed what it actualy did.
It extended the statute of limitations from 5 years to 10 years - retroactively. That means every PPP loan issued in 2020 is prosecutable until 2030. Every loan from 2021 until 2031. The government gave itself a full decade to come for you. And there using it.
According to Pandemic Oversight, as of December 31, 2024, 3,096 defendants have been charged with pandemic relief fraud. Of those, 2,532 have been found guilty. Thats 82%. And of the defendants who were convicted and sentenced, 1,741 recieved prison time - 81% of them.
The investigation timeline has accelerated dramatically. What used to take 8-12 months from initial referral to indictment now takes 4-6 months. A 45% reduction. The government has gotten faster, not slower. More efficient, not more forgiving. If your waiting for them to give up, your going to be waiting in a federal courtroom.
Defendants sentenced in 2024-2025 are receiving sentences approximately 40% longer than defendants who committed identical conduct but were sentenced in 2021-2022. Early pandemic leniency - judges who understood the economic chaos and confusion - that era is completley over. Federal judges in 2025 include prison time in nearly every PPP fraud sentencing, regardless of the amount involved.
What Just Happened in San Diego
The Southern District of California covers San Diego County and Imperial County. This is your federal jurisdiction if you live anywhere from the border to Oceanside, from El Cajon to the coast.
Leronce Suel - a San Diego restaurateur who owned Streetcar Merchants in North Park, Suckerfree Southern Plates & Bar in the Gaslamp, and ShotCaller Street Soul Food in Lincoln Park - was sentenced to 42 months in federal prison in April 2025. A federal jury convicted him in September 2024 after an eight-day trial. His restitution order: $1,773,245 to the Small Business Administration. The government also seized $1,466,918 from his home through criminal forfeiture. These were restaurants you might have eaten at. Local spots. Now the owner is heading to federal prison.
Thomas Zolezzi, a San Diego businessman, pleaded guilty in January 2025 to fraudulently obtaining nearly $3 million in PPP and EIDL loans. He received 18 months in federal prison. According to prosecutors, Zolezzi made false representations about the number of employees, payroll, and annual revenue for his business. He used the funds for personal expenses. Becuase thats what the government cares about - where the money actually went.
Denny Thakorbhai Bhakta got 235 months. Nearly 20 years. His case combined PPP fraud with a larger securities fraud scheme totaling $35 million, but the PPP component was significant - he created fake W-2 documents and used the names of victim-investors to claim them as employees. He received over $4.4 million in PPP loans and used them to keep a Ponzi scheme going and to gamble at casinos. Convicted on all 25 counts after a two-week jury trial.
One PPP application can trigger multiple federal charges:
That theoretical exposure can exceed 100 years. In practice, sentences don't reach that level. But charge stacking gives prosecutors enormous leverage in plea negotiations.
And the amount doesn't protect you. A Cincinnati defendant received 18 months in federal prison for $21,000 in PPP fraud. March 2025. Twenty-one thousand dollars. Year and a half in prison. Federal judges in 2025 are focused on deterrence, not proportionality. They want headlines. They want other people who committed PPP fraud to see these sentences and worry.
The Window Most People Miss
Something most people don't understand about PPP investigations.
There's a window - typically six to twelve months - between when the SBA Office of Inspector General flags a loan and when the case gets referred to the FBI for criminal investigation. During this window, there is leverage that completely disappears once criminal charges are filed.
During the OIG review stage, a skilled federal defense attorney may be able to negotiate a civil disposition. Repayment plus a fine. Maybe a False Claims Act settlement. The outcome isn't pleasant - nobody wants to write a check to the government - but it's not a federal felony conviction either. It's not prison. It's not a permanent criminal record that destroys everything else.
Once the FBI has the case, that door closes.
The case becomes criminal. Negotiations shift from "can we resolve this civilly" to "what sentence are we looking at." The leverage disappears. Most people don't call a lawyer until after FBI contact. By then, the window has already closed.
And here's the trap that catches people who try to handle this themselves.
Some people, panicking, decide to voluntarily repay the loan. They think returning the money 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 doesn't make it go away. It can actually strengthen the government's case against you.
Similarly, some people decide to cooperate fully with investigators. They talk to agents without a lawyer present. They think cooperation will help. There have been several recent cases where people who talked to investigators without counsel ended up being charged with obstruction or making false statements to federal agents - in addition to the underlying PPP fraud. The agents seem friendly. They're not on your side.
This is complicated. The timing matters enormously. Whether to repay, when to repay, how to structure any resolution - these decisions require counsel who understands how federal prosecutors think. Todd Spodek has handled PPP fraud investigations in the Southern District of California. 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.
When Your Ready
If you're in San Diego County - or anywhere in the Southern District of California - and you're facing a PPP loan fraud investigation, Spodek Law Group can help you understand where you stand and what options exist.
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 federal court right now?
Call us at 212-300-5196. The statute of limitations runs until 2030 or 2031 depending on when you got your loan. The government has time. But once they move, the process accelerates. What used to take a year now takes months. The earlier you have counsel, the more options exist.
Don't wait until federal agents knock on your door.
Were here when you need us.
