San Francisco PPP Loan Fraud Lawyers
You got a PPP loan during COVID. Maybe it was 2020, maybe 2021. Everyone in the Bay Area did - tech startups scrambling for runway, restaurants trying to survive, professional services firms keeping staff on payroll. You filled out the application, got approved, used the funds. Years passed. You moved on with your life. You assumed the government had moved on too.
It hasn't.
The federal government turned PPP fraud prosecution into a data-driven assembly line - and the Northern District of California is methodically working through Bay Area cases. The COVID-19 Strike Force headquarters are in Los Angeles and Sacramento, not San Francisco. But that doesn't mean your district is quiet. Congress extended the statute of limitations to 10 years. That 2020 loan you thought was forgotten? It's prosecutable until 2030. And sentences for defendants caught now are running 40% longer than two years ago.
Welcome to Spodek Law Group. We handle federal PPP loan fraud defense in San Francisco, Oakland, San Jose, and throughout the Northern 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 asking questions - this article explains what you're facing and what realistic options exist.
The Bay Area Isn't Safe From PPP Prosecution
The strike forces are in Los Angeles and Sacramento. The Central District and Eastern District of California jointly head one of three national COVID-19 Fraud Strike Force Teams. San Francisco wasn't selected.
But that dosent mean the Northern District is sitting idle.
The Northern District of California covers San Francisco, Oakland, San Jose, and much of the Bay Area. They've been prosecuting PPP fraud cases steadily - and handing out serious prison time.
Recent Bay Area PPP fraud cases:
- Cassie Will-Darnall (Santa Clara, September 2025): Sentenced to 18 months federal prison for fraudulently obtaining $2.8 million in pandemic relief funds. Judge P. Casey Pitts ordered three years supervised release. She begins serving her sentence January 7, 2026.
- Christina Burden (Oakland): Sentenced to 36 months for over $1 million in PPP and EIDL fraud. Used the money for private jet travel ($184,000), Louis Vuitton, Neiman Marcus, Nordstrom. Judge Yvonne Gonzalez Rogers ordered $1,143,191 in restitution.
- Lebnitz Tran (San Jose): Indicted for $3.6 million in fraudulent PPP and EIDL loans. Submitted 27 PPP applications with false employee information, fictitious payroll figures, and fake tax documents.
- Attila Colar (East Bay): Charged with bank fraud in connection with an alleged $22 million PPP scheme.
These aren't isolated incidents. There part of a national prosecution machine. According to Pandemic Oversight, as of December 31, 2024: 3,096 defendants have been charged with pandemic relief fraud, 2,532 found guilty (82%), and 1,741 recieved prison time - thats 81% of everyone convicted.
And the federal government gave itself a full decade to come for you. The PPP and Bank Fraud Enforcement Harmonization Act of 2022 extended the statute of limitations from 5 years to 10 years - retroactively. A 2020 loan is prosecutable until 2030. A 2021 loan until 2031.
Why 2025 Is the Worst Time to Get Caught
Early in the pandemic, some federal judges showed leniency. The economic chaos. The desperation. The confusing guidance from the SBA. Some judges gave probation or minimal prison time for smaller PPP frauds.
Those days are completley over.
Defendants sentenced in 2024-2025 are recieving sentences aproximately 40% longer than defendants who committed identical conduct but were sentenced in 2021-2022. Federal judges in 2025 include prison time in nearly every PPP fraud sentencing - regardless of the amount involved.
Look at what's happened in recent California cases. Christopher Mazzei and Erin Mazzei of Arroyo Grande were sentenced in January 2025 to 36 months and 27 months respectively for PPP fraud. Judge Seabright called there conduct "particularly blatant and egregious" and said "greed drove both of you." Robert Benlevi of Encino got over 11 years for a $27 million scheme. A Cincinnati defendant got 18 months for $21,000 in PPP fraud - thats basicly nothing in the scope of these cases, and he still went to federal prison.
The amount dosent protect you. Not anymore.
And heres the part most people dont understand about how your charged. 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 to stack charges. One PPP application can trigger multiple counts:
- Wire Fraud (18 U.S.C. § 1343) - 20-30 years
- Bank Fraud (18 U.S.C. § 1344) - 30 years
- False Statements to SBA (18 U.S.C. § 1014) - 30 years
- Money Laundering (18 U.S.C. § 1956) - 20 years
- Aggravated Identity Theft (18 U.S.C. § 1028A) - mandatory +2 years consecutive
One application. Theoretical exposure exceeding 100 years. In practice, sentences dont reach that level - but the charge stacking gives prosecutors enormous leverage in plea negotiations. Your facing a wall of felony counts, and the government knows it.
The Window That Closes Forever
Heres something most people dont understand about how these investigations work.
Theres 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 completley disappears once criminal charges are filed.
During the OIG review stage, a skilled defense attorney may be able to negotiate a civil disposition. Repayment plus a fine. Maybe a False Claims Act settlement. Not pleasant, but not a federal felony conviction either. Once the case goes to the FBI and criminal charges are filed, that option is gone. Your in criminal defense mode.
But heres the trap most people fall into.
Some people, panicking, 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 actualy strengthen the governments case against you.
And theres another trap. Several recent cases where people who decided to talk 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. Cooperative. Their not on your side. Every word you say becomes evidence.
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 and what stage your investigation is actually at.
What Bay Area Defendants Need to Know Now
The single most important rule:
Never agree to discuss a potential PPP fraud case with a federal agent without a lawyer present.
This sounds obvious. But people do it all the time. They think being cooperative will help. They think they can explain. They think the agent is just gathering information. What actually happens is they provide statements that become exhibits at there own trial.
If your under investigation or concerned you might be:
- Don't destroy any documents. Document destruction can become a separate obstruction charge - sometimes more serious then the underlying fraud.
- Don't discuss the matter with others who may be involved. Those conversations can be used against everyone.
- Don't make voluntary payments to the SBA without counsel. This can be used as consciousness of guilt.
- Contact a federal defense attorney immediately. The earlier you act, the more options exist.
Todd Spodek has handled PPP fraud cases in federal court. 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 is completley different depending on where you are in the process.
When Your Ready
If your in San Francisco, Oakland, San Jose, or anywhere in the Bay Area - and your facing a PPP loan fraud investigation - Spodek Law Group can help you understand where you stand and what options actually 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 play out in the Northern District of California?
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. But once they move, things happen fast. The earlier you have counsel, the more leverage exists.
Don't wait until federal agents show up at your door.
Were here when you need us.
