San Diego PPP Loan Fraud Lawyers

San Diego PPP Loan Fraud Lawyers

You got a letter from the SBA Office of Inspector General about your PPP loan. Or FBI agents showed up at your San Diego business asking questions. Maybe they froze your bank account – maybe you just learned you’re under federal investigation. You’re scared.

Thanks for visiting Spodek Law Group – a second generation law firm managed by Todd Spodek. Our criminal defense lawyers have over 40 years of combined experience defending clients against federal charges. We’ve handled PPP fraud investigations, we know how San Diego federal prosecutors build these cases, and what happens next in YOUR situation – the timeline, the choices, the outcomes people in your position experienced in 2025 – that’s what this addresses.

What They Already Know About Your Loan

The SBA OIG doesn’t contact borrowers for routine matters. They contacted you because their investigation found discrepancies – mismatches between your PPP application and IRS records, Suspicious Activity Reports your bank filed after seeing cash withdrawals or personal expenses, multiple loans to businesses created shortly before pandemic eligibility windows. If you received $2 million or more, SBA policy mandates an audit. When federal investigators contact you, they’ve already built significant portions of their case. Denny Thakorbhai Bhakta – a San Diego man – received a 235-month federal prison sentence in February 2025. Prosecutors showed he applied for 18 PPP loans totaling $4.4 million, created fake W-2 documents, used victim-investors’ information to claim them as employees. Investigators traced PPP funds to casinos and a Ponzi scheme. San Diego restaurateur Leronce Suel got 42 months for using $1.7 million in PPP funds to purchase a home in Arkansas. Federal agents found $2.4 million cash hidden in his bedroom. Bank records showing you bought assets with PPP funds while claiming payroll expenses – that tells the story prosecutors need. The gap between “I made a mistake” and “they think I committed fraud” comes down to circumstantial evidence showing what you did with the money.

The Next 60-90 Days

Documentation requests and subpoenas. The SBA OIG wants bank statements, tax returns, payroll records. Account freezes and asset seizures follow. If prosecutors believe you purchased assets with fraudulent loan proceeds, they’ll seize them before charges are filed.

DOJ prosecutors, FBI investigators, IRS criminal division, and SBA Office of Inspector General coordinate – building a case together. This phase takes 6-18 months from first contact to charges. During this window, you have options. Once they file charges, your options narrow. Target letter or charges filed – the U.S. Attorney’s Office for the Southern District of California is preparing to indict. The window for civil resolution closes.

Federal prosecutors distinguish between good-faith errors and intentional fraud based on patterns. Evidence of good faith – contemporaneous communications with advisors, legitimate confusion – can support civil resolution. Fake W-2s, shell companies, cash hidden in your home, personal luxury purchases immediately after receiving loan proceeds – that pattern tells a different story.

FBI Wants to Talk

They want to interview you. They’ll say cooperation helps. Everything you say can be used against you – misremembering a date, contradicting something in your application, failing to mention a detail. Under 18 U.S.C. § 1001, making a false statement to federal agents carries up to five years. Even if you’re innocent of PPP fraud, talking without an attorney creates additional charges. The Fifth Amendment protects you against self-incrimination. Exercising it preserves your options. We’ve seen clients who thought cooperating would help – only to face additional charges because they misremembered details under pressure.

Hiring a federal criminal defense attorney in San Diego immediately: your attorney can negotiate cooperation terms. If talking makes strategic sense, your attorney prepares you, clarifies what to answer and what to decline, ensures the interview doesn’t create exposure. Your attorney can potentially prevent charges through aggressive early defense. Presenting evidence of good faith error, demonstrating reliance on professional advisors, showing lack of criminal intent – these defenses work before prosecutors commit to an indictment. The misconception that “paying the money back makes this go away” is dangerous. Repayment before criminal charges are filed, combined with attorney showing repayment demonstrates good faith – that helps negotiate civil resolution. Repayment after charges doesn’t eliminate criminal liability. Timing matters.

What Actually Happened in 2025

Leronce Suel, owner of Streetcar Merchants in North Park, received 42 months federal prison for $1.7 million in PPP fraud. Denny Thakorbhai Bhakta got 235 months – nearly 20 years – for $4.4 million across 18 PPP loans. The difference? Scale, sophistication, number of victims, pattern showing deliberate intent. Cash found in Suel’s bedroom demonstrated intent. Multiple fake W-2s in Bhakta’s case showed a pattern. Two San Diego brothers facing an $8 million civil complaint haven’t been charged criminally yet – civil liability requires repayment and fines but doesn’t result in prison time.

Restitution, asset forfeiture, fines compound prison time. Full repayment ordered in virtually all cases. Assets purchased with loan proceeds get seized and sold. Fines reach $1 million. At Spodek Law Group, our criminal defense attorneys have defended clients facing federal PPP fraud investigations. We understand San Diego federal prosecutors coordinate with national strike force teams. Early intervention, strong advocacy, evidence of good faith can change outcomes. Many, many cases never become criminal charges when defense attorneys present compelling evidence before prosecutors commit to indictment. Your next move matters. Before you talk to the FBI, before you respond to the SBA – talk to someone who’s defended PPP fraud cases in San Diego. We’re available 24/7 at 212-300-5196. The window closes fast. The Fifth Amendment protects you, but only if you invoke it. Call us.