Should I Cooperate With Federal Agents About My COVID Loan? | Federal PPP/EIDL Fraud Defense Lawyers
So your probably thinking “FBI agents just contacted me about my PPP loan — should I cooperate with them or will that make things worse?” — and this is honestly one of the MOST CRITICAL strategic decisions you’ll make in your case, with the wrong choice potentially meaning the difference between probation and a decade in federal prison. The frustrating answer is: **it depends entirely on your specific situation** — cooperation can dramatically reduce your sentence in some cases (we’ve seen 30-50% reductions through substantial assistance), but in other cases talking to agents without proper protections is the BIGGEST MISTAKE you can make, giving prosecutors evidence they desperately need but don’t yet have. We’re gonna walk through exactly when cooperation makes sense vs. when it’s dangerous, the different types of cooperation agreements and their protections (or lack thereof), what FBI agents say to manipulate targets into talking, the real penalties your facing for PPP/EIDL fraud (up to 30 years in federal prison), and most importantly the ONLY safe way to cooperate if your gonna do it — which is through an experienced federal defense attorney with formal written protections in place BEFORE you say a single word to investigators.
## The Stakes: What Penalties Are You Facing for PPP/EIDL Fraud?
Before we talk about whether cooperation makes sense, you need to understand what your actually facing — because the severity of potential penalties is the PRIMARY factor in evaluating cooperation strategies.
According to recent federal sentencing data and PPP fraud penalty analysis, there is a SERIOUS risk of substantial prison time for PPP loan fraud, with penalties including **up to 30 years in federal prison** and significant fines, depending on the specific charges such as bank fraud, wire fraud, making false statements, or conspiracy.
### Federal Charges for COVID Loan Fraud:
**1. Bank Fraud (18 USC §1344)**
– **Maximum Penalty:** Up to **30 years** in federal prison + **$1,000,000 fine**
– **When Applied:** Fraud involving federally insured financial institution (which includes virtually all PPP/EIDL lenders)
– **Why It’s Serious:** This is the most serious charge prosecutors use for PPP fraud
– Most aggressive charge with longest potential sentence
**2. Wire Fraud (18 USC §1343)**
– **Maximum Penalty:** Up to **20 years** in federal prison (30 years if scheme affects financial institution)
– **When Applied:** Using electronic communications to execute fraud (emails, online loan applications, electronic signatures)
– **Why It’s Common:** Almost all PPP applications involved electronic submission = easy wire fraud charge
**3. False Statements to SBA (18 USC §1014)**
– **Maximum Penalty:** Up to **30 years** in federal prison + **$1,000,000 fine**
– **When Applied:** Making false statements on loan application to SBA or financial institution
– **Common False Statements:**
– Misrepresenting number of employees
– Inflating payroll expenses
– Fake businesses or tax documents
– Misrepresenting eligibility
– False certifications about use of funds
**4. False Statements to Federal Agency (18 USC §1001)**
– **Maximum Penalty:** Up to **5 years** in federal prison
– **When Applied:** Lying to SBA, FBI, or other federal agents during investigation
– **Critical Warning:** This charge can be added AFTER you talk to agents if they believe you lied — even if the underlying fraud case is weak, they can prosecute you for false statements made during the investigation
**5. Conspiracy to Commit Fraud (18 USC §371)**
– **Maximum Penalty:** Up to **5 years** in federal prison
– **When Applied:** Working with others to obtain fraudulent loans
– **Important:** You can be charged with conspiracy even if:
– The fraud wasn’t successful
– You only had minor role
– You didn’t personally submit the application
**6. Money Laundering (18 USC §1956, §1957)**
– **Maximum Penalty:** Up to **20 years** in federal prison
– **When Applied:**
– Moving fraudulently obtained PPP/EIDL funds between accounts
– Attempting to conceal source of funds
– Using funds for purposes to conceal fraud
– Transferring funds to others in scheme
### Recent Real Sentencing Examples:
According to Department of Justice press releases, here’s what people are ACTUALLY getting sentenced to:
1. **Leader of PPP fraud scheme: 51 months (4+ years) in federal prison** for role in scheme resulting in over $900,000 in fraudulent loans (June 2025)
2. **Morrison man: 46 months in federal prison** for obtaining over $900,000 in fraudulent PPP loans through wire fraud and money laundering (June 2025) – source
3. **Mansfield woman: 7 years (84 months) in federal prison** for $8.5 million PPP fraud scheme (January 2025) – source
4. **California man: Over 11 years (135+ months) in federal prison** for $27 million PPP fraud scheme
**These are real people who made cooperation decisions** — some cooperated and got reduced sentences, others went to trial or didn’t cooperate and received guideline sentences or above.
### Sentencing Factors That Affect Your Sentence:
According to federal sentencing guidelines for PPP fraud:
– **Total amount of fraud** (bigger dollar amount = longer sentence)
– **Criminal history** (first offender vs. prior convictions)
– **Role in the offense** (organizer/leader vs. minor participant)
– **Acceptance of responsibility** (plead guilty vs. go to trial)
– **Restitution paid** (paying back stolen funds)
– **COOPERATION WITH GOVERNMENT** ← This is where cooperation comes in
**Cooperation through a substantial assistance motion under USSG §5K1.1 can reduce your sentence by 30-50% or more** — but ONLY if done correctly through attorney-negotiated agreements with protections.
## Types of Cooperation: Understanding Your Options
There are several different types of “cooperation” with vastly different protections and consequences. Understanding the differences is CRITICAL.
### 1. Informal Cooperation (MOST DANGEROUS – NEVER DO THIS)
**What It Is:**
– FBI agents approach you (at home, business, or call you)
– Ask if you’ll “answer some questions”
– No attorney present
– No written agreement
– No formal protections
– You start talking, thinking cooperation will help
**Protections:** **NONE** — Anything you say can and will be used against you
**Why Agents Want This:**
– They get your admissions without giving you anything in return
– No limitations on how they use your statements
– You can’t take back what you said
– Easy to get inconsistent statements (which become new charges)
**Why This Is Dangerous:**
– Statements used as evidence in prosecution
– Inconsistent statements = new 18 USC §1001 false statement charges (5 years prison)
– No guarantee of any cooperation benefit
– Can’t invoke protections later
– Waive important rights
**What Agents Say to Get You to Do This:**
– “We just want to hear your side of the story”
– “This is your chance to help yourself”
– “If you don’t talk to us now, we can’t help you later” (FALSE)
– “Your partner is already cooperating; you should too”
– “We’re investigating others, not you – we just need information” (FALSE)
**OUR ADVICE:** **NEVER, EVER do informal cooperation without attorney present and formal agreement in place**
According to federal criminal defense experts, even seemingly innocent statements to federal agents can be twisted and used as evidence, and many defendants have faced additional charges for statements made during “informal” conversations with investigators.
### 2. Proffer Agreement (“Queen for a Day” Agreement)
**What It Is:**
– Written agreement negotiated by your attorney
– You meet with prosecutors and agents
– Provide information about your conduct and others’ conduct
– Government gets to “preview” your cooperation value
– Also called “proffer session” or “Queen for a Day”
**Protections (Limited):**
– **Direct use immunity:** Government generally cannot use your statements directly as evidence against you in their case-in-chief
– That’s it — very limited protection
**What’s NOT Protected:**
– **Derivative use:** Government CAN use your statements to find other evidence, then use that evidence against you
– **Impeachment:** If you testify at trial and say something different, government can use proffer statements to impeach you
– **Sentencing:** Government can use proffer statements at sentencing to argue for higher sentence
– **Perjury:** If you lie during proffer, can be prosecuted for false statements
**When Government Uses Proffers:**
– Testing whether you’re truthful
– Evaluating whether your cooperation is valuable
– Getting information to advance investigation
– NO guarantee they’ll offer cooperation agreement
– NO guarantee they’ll give you benefit even if information is helpful
**Example of Proffer Gone Wrong:**
Borrower does proffer, admits obtaining $500,000 PPP loan based on inflated payroll. Government uses information to get more evidence from bank and employees. Government decides borrower’s cooperation isn’t valuable (nothing to trade). Prosecutes borrower anyway using evidence they found through proffer information. Borrower can’t use proffer statements to defend himself.
**When Proffers Make Sense:**
– You have valuable information government doesn’t have
– Evidence against you is already overwhelming
– Attorney believes proffer might lead to cooperation agreement
– Risk assessment shows potential benefit outweighs risks
**When Proffers Are Dangerous:**
– Government’s case is weak (you’re giving them information they don’t have)
– You don’t have valuable information to trade
– You might make inconsistent statements
– You have good defenses government doesn’t know about
### 3. Formal Cooperation Agreement (Full Cooperation)
**What It Is:**
– Written agreement between you, your attorney, and government
– You agree to plead guilty to specific charges
– You agree to cooperate **fully and truthfully** in ongoing investigation
– Government agrees to file motion for downward departure at sentencing (USSG §5K1.1 or 18 USC §3553(e))
**What You Must Do:**
– **Plead guilty** to charges (usually before cooperation begins)
– **Provide complete information** about your crimes and crimes of others
– **Testify at grand jury** if requested
– **Testify at trial** against co-conspirators if requested
– **Meet with agents/prosecutors** as needed
– **Be 100% truthful** in all respects (any lie breaches agreement)
– **Continue cooperating** until all related cases resolved (can take years)
**What Government Promises:**
– **File USSG §5K1.1 motion** for downward departure at sentencing
– Motion asks court to depart below guideline range based on substantial assistance
– **May recommend specific sentence** if cooperation exceptionally valuable
– **May agree not to bring additional charges** discovered during cooperation
**What Government Does NOT Promise:**
– They don’t promise specific sentence (judge decides)
– They don’t promise you won’t go to prison
– They don’t promise to drop charges
– Departure is discretionary — judge can reject it
**Benefits of Cooperation Agreement:**
– Can reduce sentence by **30-50% or more**
– In exceptional cases, probation instead of prison
– Sometimes reduced charges (felony to misdemeanor)
– Earlier sentencing (cooperation exception to speedy sentencing)
**Risks of Cooperation Agreement:**
– **Breach:** If government believes you weren’t completely truthful, agreement is breached → they can use everything you said + prosecute you fully + no sentence reduction
– **Safety concerns:** Testifying against co-conspirators can create safety risks (witness protection rarely available for white-collar cases)
– **Delayed sentencing:** Cooperation can delay your sentencing for years while you help with other cases
– **Uncertainty:** You plead guilty and cooperate, but don’t know final sentence until cooperation complete
### 4. Deferred Prosecution Agreement (DPA) or Non-Prosecution Agreement (NPA)
**What It Is:**
– Government agrees to defer prosecution or not prosecute at all
– In exchange for restitution, cooperation, and compliance with conditions
– Typically 2-3 year agreement period
– If you comply with all conditions, charges dismissed or never filed
**Conditions Usually Include:**
– Pay full restitution
– Cooperate with ongoing investigation
– Admit to facts of offense (civil admission)
– Comply with monitoring/reporting requirements
– No new criminal conduct
**Why These Are Rare for Individual PPP Borrowers:**
– Usually reserved for corporations
– Or cases where cooperation is extraordinarily valuable
– Or cases where prosecution is weak but civil resolution appropriate
– Individual PPP borrowers rarely get DPAs/NPAs
**When You Might Get DPA/NPA:**
– You made innocent errors (not intentional fraud)
– You have extraordinary cooperation value (information about major fraud ring)
– Government’s case is weak but they want restitution
– You’re minor participant with valuable information
## When Cooperation Might Make Sense
Cooperation is NOT always the right strategy — but in certain situations, it can dramatically improve your outcome. Here are scenarios where cooperation might be appropriate:
### Situation 1: You Made Innocent Errors, Not Intentional Fraud
**Circumstances:**
– You genuinely misunderstood complex PPP eligibility rules
– You relied on accountant or advisor who gave you incorrect information
– You have documentation showing good faith efforts to comply
– Discrepancies are result of confusion, not intent to defraud
**Why Cooperation Might Help:**
– Early voluntary disclosure + full documentation + cooperation might lead to civil resolution instead of criminal prosecution
– Demonstrating good faith through transparency
– Government more likely to view as mistake rather than fraud if you come forward proactively
**Example:**
Sole proprietor calculated PPP loan based on gross revenues instead of net profit (common mistake). Has documentation showing relied on online calculator and SBA guidance. Discovers error when preparing forgiveness application. Attorney negotiates voluntary disclosure, full cooperation, immediate repayment of overpayment. DOJ decides civil resolution appropriate, no criminal charges.
**Critical:** This ONLY works if truly innocent error — if there’s evidence of intentional fraud, voluntary disclosure can backfire.
### Situation 2: Evidence Against You Is Overwhelming
**Circumstances:**
– Bank records clearly show you spent $100,000 of PPP funds on personal expenses (luxury car, home renovation, cash withdrawals)
– Application contains obviously fake documents (photoshopped tax returns, fabricated 941s)
– Multiple witnesses (employees, accountant) contradict your application claims
– Paper trail is devastating
**Why Cooperation Might Help:**
– If conviction is inevitable, cooperation is your ONLY opportunity for sentence reduction
– **”Acceptance of responsibility”** (USSG §3E1.1) reduces sentence by 2-3 levels (~25-30%)
– **”Substantial assistance”** (USSG §5K1.1) can reduce by additional 30-50%
– Early cooperation might result in fewer charges
**Example:**
Borrower obtained $800,000 PPP loan using fabricated 941 forms showing 45 employees. In reality, had only 3 employees. Spent funds on cryptocurrency and luxury watches. Evidence is overwhelming — fake documents provable, bank records show purchases. Attorney negotiates cooperation agreement: borrower pleads guilty, testifies about others in fraud ring, pays restitution. Government files §5K1.1 motion. Guideline sentence 63-78 months reduced to 36 months based on cooperation and acceptance.
**Calculation:** Without cooperation: 6+ years prison. With cooperation: 3 years. **Cooperation saved ~3 years.**
### Situation 3: You Have Valuable Information About Others
**Circumstances:**
– You were part of larger fraud scheme or ring
– You know about organizers or other participants
– You can provide evidence leading to other prosecutions
– Your testimony is necessary to prosecute higher-level targets
**Why Cooperation Might Help:**
– Government values “working up the ladder” — going after organizers and leaders
– Your cooperation might be valuable enough to warrant significant departure
– Can sometimes negotiate cooperation agreement before charges filed
**Example:**
Individual recruited by fraud ring organizer to apply for multiple PPP loans using shell companies. Recruited others for same scheme. Government investigating organizer who facilitated $15 million in fraudulent loans. Individual cooperates: provides documents, recordings, testimony about organizer’s operation. Testifies at trial. Government files §5K1.1 motion recommending probation based on substantial assistance. Individual receives probation instead of 3-5 years prison.
**Critical:** Your information must be valuable — if you’re the organizer/leader, you have nothing to trade.
### Situation 4: You Were Minor Participant in Conspiracy
**Circumstances:**
– Recruited by others to participate
– Played small role in larger scheme
– Can testify against leaders/organizers
– No prior criminal history
**Why Cooperation Might Help:**
– Government wants bigger fish
– Your role as minor participant + cooperation might result in misdemeanor plea instead of felony
– Or probation instead of prison
**Example:**
Employee recruited by employer to apply for PPP loan, with employer providing all documentation and keeping most of proceeds. Employee received $10,000 for participation. Employee cooperates against employer who organized $2 million scheme. Employee pleads to misdemeanor, receives probation. Employer receives 5 years prison.
### Situation 5: First Offender With Strong Mitigating Circumstances
**Circumstances:**
– No criminal history
– Strong family/community ties
– Medical issues or family dependents requiring care
– Economic hardship during COVID (legitimate business struggling)
– Genuine remorse and acceptance of responsibility
**Why Cooperation Might Help:**
– These factors already support lenient sentence
– Combined with cooperation, might result in probation or minimal custody
– Voluntary disclosure + restitution + cooperation demonstrates rehabilitation
**Example:**
Small business owner facing bankruptcy during COVID, panicked and inflated payroll by $75,000 to obtain larger PPP loan. Realizes mistake, voluntarily discloses through attorney, pays back overpayment, fully cooperates. No prior record, business employs 15 people in community. Government agrees to deferred prosecution — complete probation, case dismissed.
## When Cooperation Is Likely to Hurt You
In many situations, cooperation is NOT advisable and can actually make your situation worse. Here’s when cooperation is dangerous:
### Situation 1: Government’s Evidence Is Weak
**Circumstances:**
– Government’s case is largely circumstantial
– No clear proof of intent to defraud
– Possible innocent explanations for discrepancies
– Key evidence might be inadmissible or challenged
**Why Cooperation Hurts:**
– **You give them the evidence they’re missing**
– Your statements fill gaps in their case
– You admit to elements they couldn’t prove
– Better strategy: Make them prove their case, assert defenses
**Example:**
PPP application listed 18 employees, but 941s only show 12. Government investigating. Reality: Borrower counted contractors as employees (common misunderstanding), and had documentation of contractor payments. Evidence of intent to defraud is weak — might be innocent error. If borrower does proffer and admits “I knew they weren’t really employees but included them anyway” → case changes from weak to strong. Better strategy: Assert mistake of law defense, don’t provide admissions.
### Situation 2: You Committed Serious Fraud With Aggravating Factors
**Circumstances:**
– Large dollar amounts ($500,000+)
– Completely fake businesses
– Identity theft (using others’ SSNs or EINs)
– Multiple fraudulent loans
– Organized scheme
**Why Cooperation May Not Help:**
– Prosecution is certain regardless of cooperation
– Aggravating factors limit benefit of departure
– You likely don’t have valuable information (you’re the top target)
– Cooperation might reduce sentence from 10 years to 8 years — but you’re still going to prison for long time
**Strategic Consideration:**
– If sentence will be severe either way, might be better to go to trial and force government to prove case
– 10% chance of acquittal at trial might be worth more than guaranteed 8-year sentence with cooperation
### Situation 3: You Have No Valuable Information to Trade
**Circumstances:**
– Solo operation (no co-conspirators)
– No knowledge of other fraud
– No one to testify against
– Information you have is already known to government
**Why Cooperation Doesn’t Help:**
– **No cooperation value = no cooperation benefit**
– Government has no reason to file §5K1.1 motion
– You give up information and get nothing in return
– Acceptance of responsibility (guilty plea) gets you 2-3 level reduction, but full cooperation agreement would get you nothing more
**Better Strategy:**
– Plead guilty for acceptance of responsibility benefit
– Don’t do formal cooperation agreement (you have nothing to trade)
– Focus on mitigating factors at sentencing
### Situation 4: You Would Make a Poor Witness
**Circumstances:**
– Prior criminal history (credibility issues)
– Inconsistent statements already made
– Difficult personality (wouldn’t come across well to jury)
– Memory problems or documentation gaps
**Why Cooperation Might Not Be Valued:**
– Government needs credible witnesses
– If your testimony wouldn’t be effective, cooperation has less value
– Might get minimal benefit despite cooperation
### Situation 5: Potential Legal Defenses Available
**Circumstances:**
– Statute of limitations issues
– Fourth Amendment challenges (illegal search/seizure)
– Entrapment by overzealous lender representatives
– Reliance on professional advice (attorney, CPA)
– Impossible to prove specific intent to defraud
**Why Cooperation Hurts:**
– **Cooperation waives defenses**
– Once you admit guilt in cooperation agreement, can’t later assert “I didn’t do it” defenses
– Better to preserve defenses and fight the case
**Example:**
Borrower obtained PPP loan based on advice from CPA who prepared application. CPA inflated numbers without borrower’s knowledge. Borrower has reliance-on-professional-advice defense. If borrower cooperates and admits “I knew the numbers were wrong,” waives defense. Better strategy: Assert defense, point finger at CPA, make government prove borrower’s knowledge.
## What Federal Agents Say to Get You to Talk (Tactics Exposed)
FBI agents and investigators are trained in psychological manipulation to get targets to talk. Understanding their tactics helps you resist pressure.
### Tactic 1: “We Just Want to Hear Your Side of the Story”
**What They’re Really Saying:**
“We have evidence, but we want YOUR admissions to make our case stronger.”
**Reality:**
– They already have evidence (or think they do)
– Your “side of the story” is admissions they’ll use against you
– “Explaining” almost never helps — it provides evidence
**Proper Response:**
“I’d like to speak with an attorney before answering any questions.”
### Tactic 2: “This Is Your Chance to Help Yourself”
**What They’re Really Saying:**
“If you talk now without protections, we might go easier on you (but probably won’t).”
**Reality:**
– “Helping yourself” requires formal cooperation agreement with protections
– Informal cooperation rarely leads to benefit
– You can cooperate later through attorney if strategic
**Proper Response:**
“I understand. I’d like to consult with an attorney first.”
### Tactic 3: “If You Don’t Talk to Us Now, We Can’t Help You Later”
**What They’re Really Saying:**
“We want you to panic and talk before getting attorney.”
**Reality:**
– **THIS IS FALSE**
– You can cooperate later through attorney if appropriate
– Cooperation opportunities don’t disappear if you assert your rights
– In fact, cooperation is more valuable AFTER charges filed (you have more to trade)
**Proper Response:**
“I appreciate that, but I need to speak with an attorney first.”
### Tactic 4: “Your Partner/Co-Applicant Is Already Cooperating Against You”
**What They’re Really Saying:**
“We want you to think you’re in race to cooperate first, so you’ll talk without thinking.”
**Reality:**
– Sometimes true, sometimes complete bluff
– Even if true, rushing to talk without attorney is still wrong move
– First to cooperate isn’t always position
– Attorney can verify if others cooperating and advise on strategy
**Proper Response:**
“I need to consult with an attorney before making any decisions about cooperation.”
### Tactic 5: “We’re Investigating Others, Not You — We Just Need Information”
**What They’re Really Saying:**
“We’ll pretend you’re not a target to get you to talk freely.”
**Reality:**
– **If they’re talking to you, you ARE a target or subject**
– Investigators don’t contact innocent witnesses and say “we’re not investigating you”
– Your statements will be used to build case against you
– Others being investigated doesn’t protect you
**Proper Response:**
“I understand you have an investigation. I’m going to decline to answer questions without an attorney present.”
### Tactic 6: “Lawyers Will Just Make This More Expensive and Complicated”
**What They’re Really Saying:**
“We don’t want you to have attorney because attorney will protect your rights and prevent us from getting easy admissions.”
**Reality:**
– Attorney costs pale in comparison to cost of prison time
– “Complicated” means “we’ll have to actually build a case instead of using your admissions”
– Attorney makes process BETTER for you, worse for them (which is why they discourage it)
**Proper Response:**
“I’m going to exercise my right to speak with an attorney.”
### Tactic 7: “We Already Know Everything; We Just Need to Hear It From You”
**What They’re Really Saying:**
“We want you to think we have complete case, so confirming details won’t hurt. But actually we have gaps we need you to fill.”
**Reality:**
– If they “knew everything,” they wouldn’t need your statement
– They want your admissions to fill evidentiary gaps
– Even if they have strong evidence, your admissions make their case easier and reduce defenses
**Proper Response:**
“If you already know everything, then you don’t need me to answer questions. I’m going to speak with an attorney.”
## The Fifth Amendment: Your Right to Remain Silent
You have a constitutional right not to incriminate yourself. Understanding this right is critical when deciding whether to cooperate.
### What the Fifth Amendment Protects:
– Right against self-incrimination
– Cannot be forced to testify against yourself
– Cannot be forced to provide evidence that would incriminate you
– Applies to:
– Criminal investigations (before charges)
– Grand jury testimony
– Trial testimony
– Civil proceedings (with limitations)
### How to Assert Fifth Amendment Rights:
**Through Attorney (Preferred):**
“My client asserts his Fifth Amendment right against self-incrimination and respectfully declines to answer questions.”
**Directly to Agents:**
“I invoke my Fifth Amendment right to remain silent. I will not answer questions without an attorney present.”
### Consequences of Asserting Fifth Amendment:
**Criminal Case:**
– **Cannot** be used against you as evidence of guilt at trial
– Jury cannot be told you refused to talk
– Invoking rights is constitutionally protected
**Civil Case:**
– Jury **CAN** draw adverse inference from your silence
– Can hurt you in civil litigation
**Investigation:**
– Signals to government you won’t cooperate informally
– Might affect charging decision (prosecutors prefer easy cases with admissions)
– Protects you from making statements that become evidence
### When You Should Invoke Fifth Amendment:
– **Any time** truthful answer would provide evidence of crime
– When you don’t know if answer would be incriminating
– During civil SBA audits that might lead to criminal investigation
– When agents contact you without warning
– Before consulting with attorney
### Important Clarification: Accepting Responsibility vs. Cooperation
Many people confuse “acceptance of responsibility” with “cooperation.” They are different:
**Acceptance of Responsibility (USSG §3E1.1):**
– Pleading guilty (not going to trial)
– Admitting what you did
– Showing genuine remorse
– Not obstructing justice
– **Benefit:** 2-3 level reduction in offense level (~25-30% sentence reduction)
**Cooperation (USSG §5K1.1):**
– Providing substantial assistance to government
– Testifying against others
– Providing information leading to other prosecutions
– **Benefit:** Additional departure below guidelines (30-50%+ additional reduction)
**You can get acceptance of responsibility without cooperating against others.** Many defendants plead guilty, accept responsibility, and get that benefit — but don’t do formal cooperation agreement because they have no one to testify against.
## The ONLY Safe Way to Cooperate: Through Attorney With Formal Protections
If cooperation makes sense in your situation, there is ONLY ONE safe way to do it:
### Step 1: Hire Experienced Federal Criminal Defense Attorney
Not just any attorney — you need someone with:
– Extensive federal cooperation agreement experience
– Relationships with U.S. Attorneys in your district
– Track record of successful cooperation agreements
– Understanding of when cooperation helps vs. hurts
### Step 2: Attorney Conducts Privileged Case Assessment
Your attorney should:
– Review all evidence government has (or likely has)
– Assess strength of government’s case
– Determine if you have valuable information to trade
– Evaluate your credibility as witness
– Identify mitigating and aggravating factors
– Determine if cooperation makes strategic sense
**This assessment is protected by attorney-client privilege** — government cannot access it.
### Step 3: Attorney Approaches Government to Explore Cooperation
If cooperation appears beneficial:
– Attorney contacts AUSA to discuss cooperation possibility
– Attorney gauges government’s interest
– Attorney negotiates parameters of proffer or cooperation agreement
– **You don’t say anything yet** — attorney handles all communication
### Step 4: Negotiate Formal Agreement Before You Say Anything
**For Proffer:**
– Written proffer agreement with specific protections
– Clear limitations on use of statements
– Attorney present during entire proffer session
– Preparation with attorney beforehand
**For Cooperation Agreement:**
– Written cooperation agreement signed by you, attorney, and AUSA
– Specifies exactly what you must do
– Specifies what government will do (file §5K1.1 motion)
– Clear breach provisions
– Attorney reviews every detail
### Step 5: Ongoing Attorney Representation During Cooperation
– Attorney present at all meetings with agents/prosecutors
– Attorney prepares you for testimony
– Attorney monitors compliance with agreement
– Attorney protects your interests throughout process
## What to Do If FBI Agents Contact You About Your COVID Loan
If you receive contact from FBI, SBA OIG, or other federal investigators:
**STEP 1: DO NOT TALK TO THEM**
Politely say: “I need to speak with an attorney before answering any questions.”
**STEP 2: Get Their Contact Information**
– Name
– Agency
– Phone number
– Case number (if mentioned)
**STEP 3: DO NOT Let Them Into Your Home or Business**
Unless they have a search warrant, you have no obligation to allow entry.
“I’m not comfortable with you entering. If you have a warrant, please show it to me.”
**STEP 4: Contact Federal Criminal Defense Attorney IMMEDIATELY**
Same day if possible. The clock is ticking.
**STEP 5: DO NOT Discuss Contact With Anyone Except Attorney**
– Not business partners
– Not family (except spouse, limited protection)
– Not employees
– Not on social media
**STEP 6: Preserve All Documents**
– Do NOT destroy anything related to PPP/EIDL loan
– Destruction after contact = obstruction of justice
**STEP 7: Let Attorney Handle All Communication**
– Attorney contacts agents on your behalf
– Attorney gets information about investigation
– Attorney develops strategy
– Attorney negotiates any cooperation if appropriate
## Final Thoughts: Cooperation Is a Strategic Decision That Requires Expert Guidance
We’ve represented clients in hundreds of federal fraud investigations, and cooperation decisions are some of the most critical and nuanced choices they face. We’ve seen cooperation reduce sentences from 10 years to 2 years. We’ve also seen poorly executed cooperation attempts backfire and result in additional charges.
The difference? **Strategic decision-making with experienced counsel and formal protections in place.**
**Cooperation can be powerful tool in the right circumstances:**
✓ When evidence against you is overwhelming
✓ When you have valuable information to trade
✓ When you were minor participant with testimony against leaders
✓ When innocent errors and full disclosure might avoid prosecution
**But cooperation is dangerous when done wrong:**
❌ Talking to agents without attorney present
❌ No formal agreement with protections
❌ Weak government case that your statements strengthen
❌ No valuable information to trade
❌ Available defenses that cooperation would waive
**The stakes are too high to make this decision alone.** With penalties up to 30 years in federal prison, the cooperation decision might be the most important strategic choice you make in your case.
If federal agents have contacted you about your PPP or EIDL loan, or if you believe you’re under investigation, contact an experienced federal criminal defense attorney immediately. Do NOT talk to agents without attorney present. Do NOT make cooperation decisions without expert guidance. Do NOT assume cooperation will automatically help — it must be evaluated strategically based on your specific circumstances.
The right cooperation decision, properly executed with formal protections, can potentially save you years in federal prison. The wrong decision — talking informally without protections — can turn a defendable case into a guaranteed conviction.
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**LEGAL DISCLAIMER:** This article provides general information about cooperation decisions in federal PPP/EIDL fraud investigations and does not constitute legal advice for any specific situation. Cooperation decisions require careful strategic analysis based on your particular circumstances. If you are under investigation or have been contacted by federal agents, contact an experienced federal criminal defense attorney immediately for advice tailored to your situation. Nothing in this article creates an attorney-client relationship.