San Jose PPP Loan Fraud Lawyers
You got a PPP loan in 2020. Maybe 2021. You had a startup in San Jose, or maybe a small business in the South Bay. Everyone was getting PPP money - the government was practically begging companies to take it. You filled out the application, got approved, used the funds, and eventually got forgiveness. Years passed. You moved on.
The government hasn't moved on.
The Northern District of California has jurisdiction over San Jose, San Francisco, Oakland, and all of Silicon Valley. Federal prosecutors are actively pursuing PPP fraud cases in this district. A Santa Clara woman was sentenced to 18 months in federal prison in September 2025 for $2.8 million in PPP fraud - she got forgiveness on those loans and still went to prison. Congress extended the statute of limitations to 10 years in 2022. That 2020 loan you thought was ancient history? It's prosecutable until 2030.
Welcome to Spodek Law Group. We handle federal PPP loan fraud defense in San Jose and throughout the Northern District of California. If you've received a letter from the SBA Office of Inspector General, if federal agents have contacted you about your PPP application, or if you're worried that something in your 2020 loan might be scrutinized - this article explains what you're facing and what options exist.
The Feds Havent Forgotten San Jose
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.
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 there using it. As of December 2024, the COVID-19 Fraud Enforcement Task Force continues investigating PPP fraud as a top priority. The FBI San Francisco field office, IRS Criminal Investigation, and SBA OIG are all actively working cases in the Bay Area. This isnt slowing down.
The SBA Office of Inspector General has recieved more than 250,000 hotline complaints since the pandemic began. From those complaints, their data analytics team identified more than 95,000 actionable leads. According to there own testimony before Congress, that represents "more than 100 years of investigative case work." They had 536 ongoing investigations as of early 2023. That number has grown.
Your application from 2020 could be one of those 95,000 leads. You wouldnt know until agents show up or a letter arrives.
Silicon Valley Is a Target-Rich Environment
The Northern District of California covers San Jose, San Francisco, Oakland, and the entire Bay Area including Silicon Valley. This district wasnt selected as one of the five COVID-19 Fraud Strike Force regions - those are in Maryland, New Jersey, Colorado, Southern Florida, and a joint Central/Eastern California task force.
Some people assume that means prosecutions here are less aggressive. There wrong.
A Santa Clara woman was sentenced to 18 months in federal prison in September 2025. She pled guilty in January 2025 to bank fraud and wire fraud. The fraud amount: $2.8 million. She submitted PPP applications for two companies - Alternative Health Services Inc. and Rosswood Properties LLC - claiming employees and payroll that didnt exist. She got forgiveness on those loans. She still got prison.
Recent Northern California PPP fraud cases:
- Lebnitz Tran (San Jose): Arrested for $3.6 million PPP/EIDL fraud. Submitted 27 fraudulent PPP applications and 7 EIDL applications. Used funds for a $100,000 Tesla, cryptocurrency purchases, and restaurant spending. Faces up to 30 years per count.
- Akash Kumar Singh (Sacramento): Indicted for $3+ million PPP fraud through his software company Kryptoblocks. Claimed millions in revenue and employee wages when the company had no US employees.
- Manish Lachwani (Los Altos): Silicon Valley tech startup founder sentenced to 18 months for investor fraud. Tech credentials didnt protect him from federal prosecution.
Most people who think about PPP fraud prosecution imagine brazen cases - obviously fake businesses, massive schemes. But the government also pursues cases involving inflated employee counts, misrepresented payroll figures, and misuse of funds. The same data infrastructure that powers your fintech stack, your payroll software, your banking APIs - all of that creates a paper trail. Federal investigators can reconstruct exactly what you claimed versus what actualy existed.
The tech sophistication that makes Silicon Valley companies efficient also makes prosecution easier. Every API call, every transaction, every database entry becomes potential evidence.
The Numbers Behind the Prosecutions
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%)
- 1,741 received prison time (81% of those convicted)
- 2,008 were ordered to pay restitution (94%)
- Prison sentences ranged from 1 day to 30 years
These arent just numbers on a government website. This is an assembly line.
More than 440 defendants were ordered to pay $1 million or more in restitution. Restitution amounts have reached as high as $71 million. The DOJ has secured more then $500 million in civil settlements and judgments related to pandemic fraud, plus over $1 billion in forfeitures.
The uncomfortable truth that most people dont want to hear: defendants sentenced in 2024-2025 are receiving sentences aproximately 40% longer than defendants who committed identical conduct but were sentenced in 2021-2022. The early pandemic leniency is completly gone. Federal judges in 2025 include prison time in nearly every PPP fraud sentencing - regardless of the amount involved.
Recent California sentencing examples from DOJ press releases:
- Christopher Mazzei (Arroyo Grande): 36 months for $1.365 million PPP fraud
- Erin Mazzei (Arroyo Grande): 27 months for same scheme
- Jasmine Mallard-McCarter (Riverside): 84 months for $1.7 million COVID fraud she advertised on Instagram
- Denny Bhakta (San Diego): 235 months (nearly 20 years) for $4.4 million PPP fraud as part of larger Ponzi scheme
The sentencing cliff is real. If your under investigation now, you face a very different landscape then someone caught in 2021.
What Actually Happens If You Get Charged
The single most important rule if youre under investigation:
Never agree to discuss a potential PPP fraud case with a federal agent without a lawyer present.
This sounds obvious. But there have been several recent cases were 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.
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, leverage exists that completley disappears once criminal charges are filed. A skilled defense attorney may be able to negotiate a civil disposition during the OIG review stage. Repayment plus a fine. Maybe a False Claims Act settlement. Not pleasant, but not a federal felony conviction either.
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 doesnt make it go away - it can actualy strengthen the governments case against you. You need counsel before making any payments.
One PPP application can trigger multiple federal charges:
One application. Theoretical exposure exceeding 100 years. In practice, sentences dont reach that level. But charge stacking gives prosecutors enormous leverage in plea negotiations.
If you're under investigation or concerned you might be:
- Don't destroy any documents. Document destruction becomes a separate charge.
- Don't discuss the matter with others who may be involved. Those conversations can be used against you.
- 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 the Northern District of California. He understands the difference between OIG-stage investigations where civil resolution may be possible, and FBI-stage investigations where criminal defense is the priority. The timing of when you get help matters enormously.
When Your Ready
If you're in San Jose - or anywhere in the Bay Area - 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 play out in NDCA?
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.
Were here when you need us.
