You got contacted by an FBI agent about your PPP loan. Or you received a grand jury subpoena demanding PPP documents. Or a federal agent showed up at your business asking questions. You’re seeing news stories about people getting 60 months in federal prison for PPP fraud—and you’re terrified. The federal government distributed over $800 billion in PPP loans with minimal oversight during a pandemic crisis, then turned around and prosecuted borrowers when the inevitable chaos produced questionable applications. That’s not justice—that’s entrapment by bureaucracy. You need to know: Do I need a criminal defense lawyer right now? What defenses actually work? Will paying the money back stop prosecution?
Thanks for visiting Spodek Law Group—a second-generation law firm with over 50 years of combined experience. Our managing partner, Todd Spodek, has many, many, years of experience defending clients facing federal fraud charges. When Todd Spodek defended Anna Delvey, the media had already convicted her. That’s precisely when constitutional protections matter most. When you’re facing a California PPP fraud investigation, you need attorneys who understand that the Central District of California (Los Angeles) and Eastern District (Sacramento) lead one of three national COVID-19 Fraud Strike Forces—meaning prosecution here is more aggressive than in other states.
Will You Be Investigated? California’s Aggressive PPP Strike Force
Yes—California is still aggressively investigating PPP fraud in 2025. The Central District of California (Los Angeles) and Eastern District (Sacramento) were selected to head one of three national COVID-19 Fraud Strike Forces. In May 2025, 14 defendants were arrested in coordinated raids involving $25 million in fraudulent PPP and EIDL loans.
In February 2025, a Mid-City Los Angeles woman was sentenced to 60 months in federal prison and ordered to pay $2.3 million in restitution after submitting over 80 fraudulent PPP applications.
Sixty months.
Another California case involves Emanuel Tucker from Canyon Lake, who pleaded guilty in August 2025 to $15.9 million in PPP and EIDL fraud. Tucker bought a Ferrari F8 Tributo, a Bentley, and a $400,000 diamond necklace with fraudulent loan proceeds. His sentencing is scheduled for December 4, 2025, and he faces a maximum of 20 years in federal prison.
Will PPP loans under $150,000 be audited? Absolutely. The SBA states explicitly: “SBA may undertake review at any time in SBA’s discretion”. There is no safe harbor for small loans. Recent California prosecutions include defendants who fraudulently obtained as little as $20,000—and still faced federal prison time. The statute of limitations for PPP fraud was extended by Congress to 10 years, meaning the government has until 2030 or later to prosecute loans issued in 2020. Your loan size doesn’t protect you.
Defenses That Actually Work in California Federal Court
How to beat a PPP loan case? The most important defense is lack of intent—and understanding this defense reveals why the PPP prosecutions represent one of the most troubling expansions of federal fraud enforcement in decades. Under 18 U.S.C. § 1343 (wire fraud), the government must prove you knowingly submitted false information with intent to defraud. But here’s what prosecutors won’t tell you: honest mistakes do not equal fraud, confusion about eligibility rules is not criminal intent, and if you relied on your accountant’s advice, if you asked questions to the SBA and received vague guidance, if you made errors under the intense pressure of April 2020 when small businesses were collapsing overnight and the entire economy was in freefall—these facts expose the fundamental injustice of charging business owners with fraud for navigating a deliberately chaotic bureaucratic nightmare.
Evidence that demonstrates lack of intent includes emails showing you asked questions about PPP rules, documentation of reliance on professional advice, attempts to correct errors when you discovered them, and communications with the SBA where you sought clarification on confusing requirements. When prosecutors leverage the complexity of government programs to manufacture criminal cases, your attorney isn’t just presenting evidence—they’re defending the constitutional principle that criminal law requires mens rea, guilty intent, not just mistakes made under duress.
Good faith mistake is closely related to lack of intent, the PPP program was rolled out in chaos—rules changed constantly, SBA guidance was vague and contradictory, banks provided little help, and small business owners filled out applications in panic while watching their revenue disappear. The government created this chaos, then criminalized those who stumbled through it. So many mistakes were made due to poor guidance that the SBA offered amnesty to allow people time to return funds without penalties. If you can document your good faith effort to comply—such as hiring an accountant, asking questions, or attempting to repay funds when you realized errors—this defense challenges the fundamental legitimacy of the government’s case against you.
Pre-indictment negotiation is the possible outcome, the golden window that most defendants miss because they don’t hire lawyers early enough. Once the FBI contacts you, you’re in the pre-indictment phase—this is the critical window where your attorney can contact the Assistant U.S. Attorney (AUSA) before charges are filed. Your lawyer presents evidence showing mistakes rather than fraud, arranges voluntary repayment, and demonstrates cooperation. Possible outcomes include: the DOJ declines to prosecute (case closed, no criminal record), a civil settlement where you repay the loan plus penalties but receive no criminal record, reduced charges such as false statements (18 U.S.C. § 1001) instead of wire fraud, or a deferred prosecution agreement. Why does this work? It saves DOJ resources, you repay the funds so the government recovers money, and it demonstrates lack of criminal intent. If your attorney represents you before the DOJ files an indictment, you can sometimes resolve the matter without criminal charges entirely.
Challenging evidence is another defense strategy rooted in constitutional protections that exist precisely to prevent government overreach. Your attorney can file motions to suppress illegally obtained evidence under the Fourth Amendment. If federal agents obtained bank records without a proper warrant or coerced statements during interrogations—this evidence can be excluded.
What NOT to Do When FBI Contacts You
Don’t talk to FBI agents without a lawyer present! Federal agents will tell you “cooperation will help” or “you’re a witness, not a target.” These statements are often false. Anything you say will be used against you. You have a Fifth Amendment right against self-incrimination—you do not have to talk to FBI, SBA OIG, or DOJ investigators. This isn’t obstruction; it’s invoking the protections that separate free societies from authoritarian ones.
Don’t think paying the money back stops prosecution. Repayment does not stop criminal charges. Repayment helps during sentencing and plea negotiations, but the DOJ can still charge you with fraud after repayment. Recent examples include defendants who repaid PPP loans and still received 60-month prison sentences.
Don’t think your small loan protects you. “My loan was under $150,000, they won’t care” is false. The SBA can audit any loan at any time. California prosecutors have charged defendants with PPP fraud for loans as small as $20,000. Loan size may affect sentencing under the Federal Sentencing Guidelines, but it does not prevent charges from being filed.
Don’t participate in a “proffer session” without a lawyer. A proffer is when you confess to federal prosecutors and they decide whether to prosecute you. Prosecutors can use proffer statements against you if negotiations fail.
Why You Need a Criminal Defense Lawyer NOW—Before Charges Are Filed
Once the FBI contacts you, you’re in the pre-indictment phase. Your attorney can negotiate with the AUSA before charges are filed. After indictment, 98% of federal cases plead guilty—you’ve already lost most of your leverage.
The pre-indictment window is your opportunity.
Your constitutional rights are at stake. The Fifth Amendment protects your right against self-incrimination—you don’t have to talk. The Sixth Amendment guarantees your right to counsel during all interactions with federal agents. The Fourth Amendment protects you from unreasonable searches and seizures. These constitutional protections exist to prevent government overreach—but they require lawyers who understand how to wield them.
California’s Strike Force prosecution is different from other states. FBI agents are embedded with prosecutors from the start, creating coordinated investigations with virtually unlimited resources. Central District judges impose harsh sentences—60-month averages for $2+ million fraud cases.
Spodek Law Group has defended clients in high-profile federal cases. Todd Spodek is a second-generation criminal defense attorney with many, many, years of experience. He represented Anna Delvey in a grand larceny case that became a Netflix series—a case where public opinion had already convicted his client, which is precisely when vigorous defense matters most. Constitutional protections aren’t just for popular defendants; they exist specifically to protect unpopular ones. Unlike other law firms who are more focused on their relationship with prosecutors and judges, Spodek Law Group owes loyalty only to you. That’s not just marketing; that’s constitutional obligation. We are available 24/7.
Don’t Talk—Call a Lawyer
If the FBI, SBA OIG, or DOJ has contacted you about your PPP loan, don’t answer questions. Don’t sign anything. Don’t think you can handle this yourself. Exercise your Fifth Amendment right to remain silent and your Sixth Amendment right to counsel.
Call us. Now.
Spodek Law Group: 212-300-5196. Risk-free consultations. Available 24/7.