## How to Handle an SBA Subpoena for PPP Loan Records
Envelope from SBA Office of Inspector General. Subpoena demanding PPP loan records. Twenty-one day deadline. Bank statements 2019-2021. Tax returns. Payroll records. IRS Form 941s. Forgiveness application materials. You think: comply quickly, show cooperation, clear this up.
Stop.
Criminal investigation. Federal subpoena means criminal investigation underway, your cooperation builds the case against you, every document you hand over becomes prosecution evidence that can destroy your defense. The SBA Office of Inspector General doesn’t issue subpoenas for routine audits – special agents with federal arrest authority investigate federal crimes, they’re building a criminal case right now. Todd Spodek and our team have defended federal fraud cases for many, many, years – from high-profile prosecutions like Anna Delvey to business owners facing SBA subpoenas and PPP fraud investigations, we know how federal prosecutors use your own documents to annihilate your defense. We’re a second generation law firm with over 50 years combined experience. Many of us used to be prosecutors. **Call 212-300-5196** before responding. Every document produces prosecution evidence.
## What an SBA Subpoena Means
Are people being subpoenaed for PPP loans? Yes. Extensive subpoena activity in 2025, it’s everywhere, the government is obliterating PPP defendants nationwide with subpoena-based prosecutions. The Central District of California was designated as one of three national COVID-19 Fraud Strike Force locations – specialized prosecution units focused exclusively on pandemic fraud, they exist only to destroy PPP loan recipients. FBI Los Angeles Field Office (11000 Wilshire Boulevard, Suite 1700, LA 90024), IRS Criminal Investigation (300 North Los Angeles Street, LA Federal Building), and SBA OIG coordinate to issue subpoenas and build criminal referrals. Cases proceed in Edward R. Roybal Federal Building (federal prosecutors love defendants who cooperate before hiring attorneys).
How are PPP loans being investigated? Four-step process. First, AI algorithms scan applications for anomalies – mismatches between certified payroll and IRS 941 filings, discrepancies between claimed employees and actual tax records. Second, human analysts flag applications “likely fraudulent.” Third, SBA refers cases to OIG. Criminal.
SBA issues three types of demands for records. Administrative subpoenas under 18 USC § 3486 – issued by SBA OIG directly, critical difference is information can be shared between civil AND criminal investigations (unlike grand jury subpoenas protected by Fed. R. Crim. P. 6(e)), often unclear whether investigation is civil or criminal, documents you produce can be used to prosecute you criminally AND sue you civilly, they can wreck you twice with the same evidence. Grand jury subpoenas issued by federal grand jury through U.S. Attorney’s Office Central District of California Major Frauds Section – clearly criminal investigation, authority under Fed. R. Crim. P. 17, two types: duces tecum (documents), ad testificandum (testimony), both can cripple your defense if handled wrong. SBA document requests under 13 CFR § 120.1010 – NOT technically a subpoena, thirty-day response deadline, non-compliance can trigger loan default or OIG escalation.
## Your Fifth Amendment Rights
The Fifth Amendment states: “No person…shall be compelled in any criminal case to be a witness against himself.”
General rule: Fifth Amendment does NOT protect corporations or business organizations. Does NOT protect contents of pre-existing documents.
Critical exception: Act of Production Doctrine. Fifth Amendment DOES protect when the ACT of producing documents has testimonial, self-incriminating aspects. Three communicative inferences:
**Existence**. Producing documents admits they exist.
**Possession**. Producing documents admits you have/had them.
**Authentication**. Producing documents admits you believe these are the requested records.
When all three inferences are BOTH testimonial AND incriminating, Fifth Amendment protection may apply. Example: Subpoena demands “all documents showing how you spent PPP funds,” you have bank records showing funds went to crypto and luxury cars, producing those records would admit they exist, you possessed them, they’re authentic – all testimonial and incriminating, all devastating to your defense.
Important: narrow exception. Attorney must analyze each case.
Right to refuse interview. Absolute right. Refusal cannot be used as evidence at trial. If OIG contacts you: “I am exercising my Fifth Amendment right to remain silent, I will not answer questions without my attorney, direct all communications to my lawyer.” Stop talking.
## Penalties for Ignoring a Subpoena
Civil contempt: Coercive penalties, $1,000+ per day until compliance, indefinite jail (“you carry the keys”), U.S. Marshals arrest and hold you until you produce documents.
Criminal contempt: Punitive penalties, authority 18 USC § 401 and 18 USC § 402, up to 6 months jail (standard), up to 18 months prison (serious contempt per *United States v. Barnette*), separate criminal record, court fines.
Obstruction. If you destroy documents (18 USC § 1519, 20 years prison). Twenty years.
In PPP context, non-compliance signals guilt, eliminates cooperation value, provides additional charges (contempt + obstruction + underlying fraud), it ruins any chance at favorable plea negotiations.
Deadlines: 14-30 days typical. Attorney can negotiate extensions. NEVER ignore subpoena. NEVER respond without attorney. NEVER talk to agents without counsel.
## What Documents They Want
What documents do SBA subpoenas demand? PPP application materials – SBA Form 2483, lender application, certifications, gross receipt calculations, supporting documentation, discrepancies become false statement charges that can shatter your entire defense.
Payroll records – most critical, prosecutors demolish PPP defendants with payroll discrepancies, IRS Form 941 (2018-2021), W-2s, 1099s, payroll registers, health insurance records, retirement contributions, prosecutors compare certified payroll against actual 941 filings, certified $400K quarterly payroll but 941s show $40K that’s bank fraud, claimed 40 employees but IRS shows 4 that’s false statements, payroll discrepancies are primary fraud indicator, they annihilate your credibility at trial.
Financial records – bank statements (all business accounts 2019-2021), general ledger, P&L statements, tax returns (1120, 1120-S, 1065, Schedule C for 2018-2021), bank records trace every PPP dollar, crypto transactions, luxury cars, personal expenses, visible in statements, government forensic accountants analyze every transaction hunting for misuse that can obliterate your defense.
Forgiveness materials – SBA Form 3508, supporting docs, lender decision, SBA determination, prosecutors compare original application against forgiveness application, inconsistencies create additional false statement charges, each inconsistency is a new way to wreck your case.
Business formation – Articles of incorporation, operating agreements, licenses, EIN confirmation, verify business existed when claimed, business dissolved 2019 but applied for PPP 2020 those formation records prove fraud, they erase any good faith defense.
Use of funds – invoices, receipts, lease/mortgage records, utility payments. Are SBA loan records public? Some PPP data public under FOIA. But investigation materials, subpoenaed documents, grand jury materials protected during investigation (Fed. R. Crim. P. 6(e)).
SBA requires 6-year retention from forgiveness/repayment. Incomplete production triggers civil contempt. Destroying documents after subpoena = obstruction (18 USC § 1519, 20 years). Missing one category of documents doesn’t mean “I lost them” – it means contempt charges, adverse inference at trial, prosecutors telling jury your destruction proves guilt, it devastates any defense.
Document preservation obligation begins the moment you reasonably anticipate investigation – not when subpoena arrives, deleted anything after receiving OIG inquiry letter that’s obstruction, that can ruin everything. “My accountant handles that” isn’t a defense. You’re the PPP applicant, you certified the information, federal prosecutors will argue YOU had control over records regardless of who maintained them day-to-day (we’ve watched this happen countless times – prosecutors shred that excuse).
## Why You Need a Federal Criminal Defense Attorney NOW
Subpoena deadlines: 14-30 days, response requires time, documents, review, privilege analysis, Fifth Amendment evaluation, once deadline passes contempt charges, arrest, forced compliance.
Generic attorneys fail. They don’t understand administrative vs. grand jury subpoena differences, they don’t know act of production doctrine, they don’t have relationships with AUSAs in Central District of California Major Frauds Section, they can’t protect you.
Todd Spodek and our team have defended federal fraud cases for many, many, years – high-profile cases like Anna Delvey, business owners facing SBA OIG investigations, complex federal fraud prosecutions where document production can make or break everything. We’re a second generation law firm with 50+ years combined experience. Many of us used to be prosecutors – we know how DOJ builds PPP cases from subpoenaed documents, we know how they weaponize your cooperation to crush your defense, we know how forensic accountants dissect every record hunting for discrepancies that can demolish credibility. Unlike other law firms who are more focused on their relationship with prosecutors and judges, we’re focused on protecting YOUR Constitutional rights and getting you the possible outcome, we work with forensic accountants to review documents BEFORE production, we appear weekly in federal court Central District of California.
What attorney does: Reviews subpoena scope, files motion to quash if overly broad, evaluates Fifth Amendment protection (act of production doctrine analysis), negotiates deadline extension, supervises document collection – produce exactly what’s required nothing more (don’t volunteer evidence that can eviscerate your defense) nothing less (avoid contempt), reviews documents before production, identifies discrepancies that could annihilate credibility, prepares privilege log, creates certification language avoiding false statement charges (18 USC § 1001), prevents you from talking to agents (one interview can wreck everything), if grand jury testimony demanded prepares Fifth Amendment invocation or negotiates immunity.
**Call 212-300-5196.**