FEDERAL CRIMINAL LAWYERS

Do I need a Alabama PPP Loan Fraud Lawyer

You received a letter from the SBA about your PPP loan—or worse, from the FBI or the U.S. Attorney’s Office for the Northern District of Alabama in Birmingham, the Middle District in Montgomery, or the Southern District in Mobile. They’re questioning whether your employees were real, whether your payroll figures matched your tax returns, whether you spent the funds on payroll as promised; and you need to understand whether federal prosecutors in Alabama are actually filing criminal charges over pandemic-era loan applications, what prison time you’re facing, and whether hiring an attorney who defends federal cases nationwide makes any difference.

Understanding what Alabama federal prosecutors are actually doing requires seeing these cases play out across multiple federal districts. Todd Spodek, a second-generation criminal defense attorney who learned federal practice from his father, leads Spodek Law Group’s nationwide federal defense practice with over 50 years of combined experience including former federal prosecutors. When you’re facing potential federal prosecution in Alabama for a PPP loan you thought was legitimate emergency relief, your Fifth Amendment right against self-incrimination and your Sixth Amendment right to effective counsel aren’t theoretical; they’re your only defense against a system that convicts 95-97% of defendants who go to trial. Call 212-300-5196.

What’s Happening Right Now

Alabama’s three federal districts—Northern District covering Birmingham and Huntsville; Middle District covering Montgomery; Southern District covering Mobile—prosecuted 109 PPP fraud cases between 2023 and 2025, and the Southern District has been the most aggressive: they’re filing criminal charges for loans as small as $20,000, which means if you received even a modest PPP loan and the SBA audit flagged discrepancies, you’re at serious risk of federal prosecution in Mobile, and the Northern District prosecuted 47 cases with documented sentences including 41 months federal prison for a $60,000 loan—dispelling any notion that “small” loans don’t generate real prison time—and the Middle District prosecuted 28 cases and typically prioritizes loans over $150,000, but that pattern is shifting as the five-year statute of limitations approaches and prosecutors accelerate charging decisions for older pandemic-era loans, meaning business owners who thought they were safe because their loan was “only” $75,000 or $100,000 are now receiving target letters as 2025 progresses, and this prosecutorial aggression creates a selective enforcement problem that raises due process concerns because the government distributed over $800 billion in PPP funds with minimal oversight during the pandemic, issued contradictory guidance about eligibility and permissible uses that changed multiple times during the program, told borrowers that loans would be forgiven if spent on payroll without requiring the kind of documentation they’re now demanding, then reversed course and began prosecuting business owners who relied on those representations when their documentation didn’t satisfy standards that literally didn’t exist at the time they applied, and when tens of thousands of Alabama businesses received PPP loans with similar documentation issues—mismatched payroll figures, estimated employee counts, incomplete supporting documents—but only 109 faced criminal charges, the question isn’t just whether your application was technically accurate under standards that were constantly changing; it’s why your case was selected for federal prosecution when thousands of others with comparable or even worse conduct were not, and that arbitrary selection is where attorneys who defend federal cases across multiple districts—like those at Spodek Law Group who have handled PPP fraud investigations from New Jersey to California to Alabama—provide critical context when negotiating with Alabama prosecutors about whether charges are warranted, because understanding how different U.S. Attorney’s Offices approach identical conduct in other jurisdictions creates pressure for consistent treatment rather than arbitrary enforcement, and when a $75,000 loan with payroll discrepancies generated a declination in the Eastern District of New York but criminal charges in Montgomery, that disparity becomes relevant evidence of selective prosecution.

Your Choices in the Next 30 to 60 Days

If the SBA flagged your loan, the Office of Inspector General conducts an initial audit comparing your PPP application to IRS records and banking records looking for discrepancies. When the OIG believes fraud occurred, they refer the case to the FBI, which opens a criminal investigation that typically lasts 6 to 18 months; during this window, federal agents will likely contact you asking you to “clarify” information, and this is the most dangerous moment because anything you say will be used to build the criminal case against you and any misstatement creates a separate federal charge under 18 U.S.C. § 1001 for making false statements.

Do you speak to federal agents? No—invoke your Fifth Amendment right to remain silent. Do you voluntarily make restitution, thinking this will convince prosecutors you weren’t trying to commit fraud? This won’t prevent charges; prosecutors will argue your sudden repayment demonstrates consciousness of guilt. Do you wait until you’re charged before hiring an attorney? No—by then, the window to negotiate has closed. Former federal prosecutors, like those at Spodek Law Group, understand what evidence gaps exist, what exculpatory evidence can be presented before charges are filed to convince prosecutors they can’t prove intent beyond a reasonable doubt.

Your Fifth Amendment privilege applies during the investigation, not just after arrest. The government wants you to believe that cooperating will help you, that explaining the “misunderstanding” will clear things up—but these are tactics designed to gather evidence. Your opportunity to prevent charges exists only during the investigation, when prosecutors are still evaluating whether they can prove criminal intent, and that window closes the moment they present evidence to a grand jury.

What You’re Actually Facing

Defendants sentenced in Alabama federal courts in 2024 and 2025 are receiving prison terms approximately 40% longer than defendants sentenced in 2021 and 2022—a $200,000 PPP fraud case that generated 18 months in 2021 now generates 28 to 30 months. Alabama federal judges follow national patterns: small loans ($20,000-$75,000) generate 12 to 30 months; medium loans ($75,000-$350,000) generate 30 to 60 months; large loans over $350,000 can generate 60 to 120 months.

Beyond prison time, you face mandatory restitution for the full loan amount, supervised release (typically 3 years), and civil penalties under the False Claims Act allowing the government to seek treble damages plus $27,894 per false statement—meaning a $150,000 loan with three false statements generates $450,000 in civil damages plus $83,682 in penalties, for total civil liability exceeding $533,000. Your business will likely be debarred from future federal contracts, professional licenses may be revoked, and the federal conviction follows you permanently. Having defended federal fraud cases that attracted national media attention—like Todd Spodek’s representation of Anna Delvey, whose story became the Netflix series “Inventing Anna”—the firm brings experience with cases where public perception creates challenges beyond the evidence.

Federal criminal procedure is uniform across all districts—the Federal Rules of Criminal Procedure and U.S. Sentencing Guidelines apply identically in Birmingham, Montgomery, and Manhattan, which means geographic proximity doesn’t provide any procedural advantage, and the Sixth Amendment guarantees effective counsel, not local counsel, so what nationwide federal practice provides is comparison and negotiating power: when your attorney has negotiated with dozens of U.S. Attorney’s Offices, they can demonstrate to Alabama prosecutors that similar conduct in other jurisdictions resulted in declinations or reduced charges, and Alabama federal prosecutors are reasonable—they don’t want to prosecute business owners who made good-faith mistakes during a chaotic pandemic program—but they need evidence demonstrating lack of criminal intent, which is where Spodek Law Group’s nationwide practice and former federal prosecutors on staff make the difference in identifying what evidence gaps exist before charges are filed.

If you’ve received any communication from the SBA, FBI, or U.S. Attorney’s Office: first, do not speak to federal agents without an attorney—invoke your Fifth Amendment right to remain silent. Second, preserve all documents related to the PPP loan—destroying evidence is obstruction of justice under 18 U.S.C. § 1519 and creates separate charges. Third, do not make voluntary restitution without consulting experienced federal defense counsel. Fourth, understand that “small” loan amounts don’t protect you—the Southern District is charging loans as small as $20,000.

The timeline matters: if you’re still in the investigation phase before charges are filed, you have options. Your attorney can contact the U.S. Attorney’s Office, learn what evidence they’ve compiled, present exculpatory evidence, and potentially convince prosecutors to decline charges. If you’ve received a target letter, you’re closer to indictment but still have opportunity to negotiate.

Contact Spodek Law Group at 212-300-5196. The constitutional protections that matter most—your Fifth Amendment privilege against self-incrimination and your Sixth Amendment right to effective counsel—are most valuable before the government has decided to charge you.

Sources

¹ Law Offices of Johnathan L. Williams, “Understanding PPP Fraud in Alabama: What You Need to Know About Federal Prosecution” (2025), https://johnathanlwilliams.com/understanding-ppp-fraud-in-alabama-what-you-need-to-know-about-federal-prosecution/

² NYC Criminal Attorneys, “Alabama PPP Loan Fraud Lawyers” (2025), https://www.nyccriminalattorneys.com/alabama-ppp-loan-fraud-lawyers/

³ Federal Lawyers, “NJ SBA Fraud PPP Loan Fraud Defense Lawyers” (2025), https://www.federallawyers.com/nj-sba-fraud-ppp-loan-fraud-defense-lawyers/

⁴ Federal Lawyer, “What are the Charges for PPP Loan Fraud?” (2025), https://federal-lawyer.com/what-are-the-charges-for-ppp-loan-fraud/

⁵ NJ Criminal Attorneys, “Alabama EIDL Loan Fraud Lawyers” (2025), https://www.njcriminalattorneys.com/alabama-eidl-loan-fraud-lawyers/

⁶ NJ Criminal Attorneys, “Montgomery PPP Loan Fraud Lawyers” (2025), https://www.njcriminalattorneys.com/montgomery-ppp-loan-fraud-lawyers/

⁷ Federal Lawyers, “Alabama PPP Loan Fraud Lawyers” (2025), https://www.federallawyers.com/alabama-ppp-loan-fraud-lawyers-3/