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So your probably freaking out right now because you just got a letter from the DOJ or maybe the FBI showed up at your door asking questions about that PPP loan you got back in 2020. Maybe you stretched the truth a little on the application. Maybe you used some of the money for personal expenses instead of payroll. Or maybe your accountant told you it was fine to inflate your numbers and now your wondering if that was actually legal. Look, we get it. Your TERRIFIED. And honestly? You should be! Because the federal goverment is still aggressively prosecuting PPP loan fraud in 2025 with penalties up to 30 YEARS IN PRISON!
Let me tell you what PPP loan fraud really is – and its broader than most people think. PPP loan fraud is basically any false statement or misrepresentation that was made to secure or use PPP funds. That can include lying about your payroll, inflating the number of employees, or using the money on personal items. But here’s what really gets people in trouble – the federal prosecutors don’t need to prove you intended to commit fraud from the beginning. They just need to show you made false statements.
We’ve seen cases where business owners thought they were being clever by “rounding up” there payroll numbers or including family members who didn’t actually work for the company. The feds consider that fraud. Creating a business just for the PPP loan? Fraud. Using your real business but exaggerating expenses? Fraud. Even keeping poor records that you can’t prove how you spent the money? They’ll call that fraud too.
The most common types of PPP fraud charges we’re seeing include lying about the number of employees, inflating payroll costs, creating fake businesses, using funds for non-approved purposes, applying for multiple loans through different lenders, and falsifying tax documents. And here’s the kicker – even if your loan was forgiven, your NOT in the clear! The SBA Office of Inspector General is still reviewing forgiven loans and referring cases for prosecution.
Want to know what happens when your PPP loan gets flagged? First, you’ll usually recieve a letter from either the SBA, DOJ, or FBI. Sometimes its called a “target letter” which basically means your the target of a criminal investigation. Other times its a subpoena demanding all your business records. We’ve even seen cases where federal agents just show up at people’s homes or businesses without warning.
Once your loan is flagged, the investigation can take months or even years. The feds will go through everything – your bank records, tax returns, emails, text messages, social media posts. They’ll interview your employees, your accountant, even your family members. There using sophisticated data analytics to identify suspicious patterns. According to the Pandemic Response Accountability Committee, they’ve flagged over 2 million loans for review!
If they find evidence of fraud, you could face criminal charges, civil lawsuits, or both. The criminal charges usually include wire fraud, bank fraud, making false statements to a federal agency, money laundering, and conspiracy. Each charge carries its own penalties and they love to stack them up. We’ve seen people facing 5, 10, even 15 different charges for a single PPP loan!
Alot of people think that because the PPP program ended years ago, the goverment has moved on. WRONG! The federal government is more aggressive than ever in 2025. The COVID-19 Fraud Enforcement Task Force has been given extended funding through at least 2027. There dedicating billions of dollars and thousands of agents to these investigations.
Just look at the numbers – in 2024 alone, the DOJ charged over 3,000 individuals with pandemic-related fraud totaling more than $1.4 billion. And that’s just criminal charges! The civil investigations under the False Claims Act resulted in another $2.9 billion in recoveries. The government has explicitly stated they plan to pursue these cases for the next several years.
What’s really scary is there using artificial intelligence and machine learning to identify potentially fraudulent loans. They’re cross-referencing PPP applications with tax returns, state business registrations, unemployment claims, and even social media posts. If you posted pictures of your new boat or vacation while claiming your business was struggling, guess what? That could trigger an investigation!
The short answer? YES, absolutely you can go to jail for PPP loan fraud. And we’re not talking about county jail for a few months – we’re talking about federal prison for YEARS or even DECADES. The penalties are absolutely insane and judges are handing down harsh sentences to “send a message.”
Here’s what your facing if convicted: Wire fraud under 18 USC §1343 carries up to 30 years in prison. Bank fraud under 18 USC §1344 also carries up to 30 years plus a $1 million fine. Making false statements under 18 USC §1001 is up to 5 years. If they throw in money laundering charges, that’s another 20 years per count. And if you used someone else’s identity? Aggravated identity theft carries a mandatory 2 years consecutive to any other sentence.
We’ve seen first-time offenders with no criminal history get sentenced to 5+ years in federal prison. One client’s competitor got 11 years for a $3.5 million PPP fraud scheme. Another business owner in Florida just got 6 years for a $900,000 loan. The judges don’t care if your a good person who made a mistake – they’re under pressure to be tough on pandemic fraud.
The financial penalties will absolutley destroy you. Beyond the criminal fines (up to $1 million per charge), you’ll have to pay back every penny of the loan plus interest. Then there’s the civil penalties under the False Claims Act which TRIPLES the damages. So if you got a $500,000 PPP loan fraudulently, you could owe $1.5 million just in civil penalties!
But wait, it gets worse. The government can and will seize your assets through civil forfeiture. We’re talking about your house, cars, bank accounts, retirement funds, even your kids’ college savings. They’ll put liens on everything you own. And bankruptcy won’t save you – fraud debts are non-dischargeable.
Plus there’s the hidden costs nobody talks about. Legal fees for a federal criminal defense can easily run $100,000 to $500,000 or more. If you own a professional license (doctor, lawyer, accountant, real estate), you’ll probably lose it. Your credit will be destroyed. You won’t be able to get business loans or goverment contracts ever again. Some people have even been deported after serving there prison sentences!
You want to know what triggers these investigations? The government is using incredibly sophisticated methods to identify fraud. First, they’re running algorithms that compare your PPP application to your tax returns. If you claimed 25 employees on your PPP loan but only reported 10 on your 2019 taxes, red flag! If you got a PPP loan and also collected unemployment, red flag! If your business was registered after February 2020, huge red flag!
Banks are also required to file Suspicious Activity Reports (SARs) for unusual transactions. Moving PPP funds to personal accounts, large cash withdrawals, transfers to cryptocurrency – all of these trigger SARs. We’ve seen cases where people got caught because they immediately bought luxury items or paid off personal debts with PPP funds.
But here’s what’s really scary – whistleblowers. The False Claims Act pays whistleblowers up to 30% of whatever the goverment recovers. Your disgruntled employees, competitors, ex-spouses, even your accountant could report you. We had one client who got reported by there own bookkeeper who wanted the reward money! The government gets thousands of these qui tam lawsuits and investigates every credible one.
If your under investigation for PPP loan fraud, DO NOT TALK TO ANYONE WITHOUT A LAWYER! We cannot stress this enough. The FBI and IRS agents are trained to get you to admit things that seem innocent but are actually incriminating. “I might have made some mistakes” becomes an admission of guilt. “I relied on my accountant” becomes evidence you knew something was wrong.
Here’s what you need to do immediately. First, hire an experienced federal criminal defense attorney who specializes in PPP fraud cases. Not your family lawyer, not your business attorney – someone who knows federal court and understands these specific charges. Second, preserve all documents related to your PPP loan but don’t alter or destroy anything! Obstruction of justice charges are often worse than the original fraud charges.
Start gathering your defense materials now – emails with your accountant, proof of eligible expenses, evidence of business operations, payroll records, tax returns, bank statements. But don’t organize these yourself – let your attorney do it so everything is protected by attorney-client privilege. And whatever you do, don’t try to “fix” the problem by filing amended returns or sending money back to the SBA without legal counsel. That could be seen as an admission of guilt!
Everyone asks us this – can I just pay back the loan and make this go away? The answer is… its complicated. Simply paying back the loan does NOT guarantee you won’t be prosecuted. We’ve seen plenty of people pay back there entire PPP loan and still get charged with federal crimes. The DOJ’s position is that returning stolen money doesn’t erase the crime.
However, voluntary disclosure and repayment can help in some situations. There’s no official amnesty program, but if you come forward before your under investigation, it might help. The key word is BEFORE. Once you get that target letter or subpoena, its usually too late for voluntary disclosure to help much. Prosecutors might consider it as a mitigating factor during plea negotiations, but it won’t make the charges disappear.
Some people have had success with the IRS Voluntary Disclosure Program if there are tax issues involved. But this is extremely technical and you need an attorney to navigate it properly. One wrong word in your disclosure and you’ve just confessed to federal crimes!
Look, we’re not gonna sugarcoat this – PPP fraud cases are tough to defend. But there ARE defenses that work if you have the right attorney. The biggest one is lack of intent. The government has to prove you KNOWINGLY made false statements. If you genuinely believed your application was accurate based on confusing guidance or advice from professionals, that’s a defense.
Good faith reliance on professional advice is huge. If your accountant or attorney told you something was permissible and you reasonably relied on that advice, it could defeat the fraud charges. But you need contemporaneous evidence – emails, text messages, memos showing you sought and followed professional guidance. We’ve won cases where clients had written proof there accountant said certain expenses were eligible.
Challenging the calculation methods is another strong defense. The PPP rules were incredibly confusing and changed constantly. Different agencies gave conflicting guidance. If you calculated your loan amount using a reasonable interpretation of the rules at the time, that might not be fraud even if the government disagrees with your math now. Remember, the government has to prove fraud beyond a reasonable doubt – that’s a very high standard!
If your convicted of PPP fraud, your life is basically over as you know it. First comes sentencing, and federal judges are hammering people with serious time. The federal sentencing guidelines are complicated but generally the bigger the fraud amount, the longer the sentence. Even a $100,000 fraud could get you 2-3 years. Over $550,000? Your looking at 5+ years minimum. Over $3.5 million? Could be 10+ years.
You’ll serve at least 85% of your sentence – there’s no parole in the federal system. You might get some time in a halfway house at the end, but your doing hard time in federal prison. Not some minimum security camp – actual prison with violent criminals, gangs, and horrible conditions. We’ve had clients who were successful business owners serving time next to murderers and drug dealers.
After prison comes supervised release (basically federal probation) for 3-5 years. You’ll have to report to a probation officer, pass drug tests, get permission to travel, and follow dozens of other conditions. Any violation sends you back to prison. Plus you’ll be paying restitution for the rest of your life – the government will garnish your wages, seize tax refunds, and take anything of value you acquire.
This is not the time to cheap out on legal representation or hire your cousin who does DUIs. Federal PPP fraud cases are incredibly complex and require specialized knowledge. We understand the CARES Act inside and out. We know how the SBA calculated loan amounts, what expenses were eligible, and where the gray areas are in the regulations.
More importantly, we know the prosecutors and how they think. We’ve negotiated with the COVID-19 Fraud Enforcement Task Force. We understand there pressure points and what arguments actually work. We know when to fight and when to negotiate. We’ve gotten cases dismissed, charges reduced, and sentences minimized that other attorneys wouldn’t even attempt.
Don’t wait until its too late. The earlier we get involved, the better your chances. We can sometimes intervene before charges are filed and convince prosecutors not to pursue the case. Or negotiate a civil resolution instead of criminal charges. But once your indicted, your options become much more limited and expensive.
URGENT: If you’re under investigation for PPP fraud, call us NOW at 212-300-5196
The feds are moving FAST and you need protection immediately!
We answer 24/7 because federal agents don’t work banker’s hours!
Look, we know your scared. We know this is probably the worst thing that’s ever happened to you. But you don’t have to face it alone. We’ve helped hundreds of business owners navigate PPP fraud investigations and we can help you too. The sooner you call, the more options you have. Don’t let fear or embarrassment stop you from getting the help you desperately need. Your freedom, your family, and your future are all on the line. This is not the time to hope it goes away – it won’t. The federal government has unlimited resources and there coming for everyone who committed PPP fraud. But with the right defense team, you can fight back and protect yourself. Call us right now before its too late!
Very diligent, organized associates; got my case dismissed. Hard working attorneys who can put up with your anxiousness. I was accused of robbing a gemstone dealer. Definitely A law group that lays out all possible options and best alternative routes. Recommended for sure.
- ROBIN, GUN CHARGES ROBIN
NJ CRIMINAL DEFENSE ATTORNEYS