What You Need to Know If You’re Under Investigation
The Paycheck Protection Program (PPP) was a lifeline for countless small businesses during the pandemic. But in the years since, federal prosecutors have aggressively pursued allegations of PPP loan fraud—charging thousands of business owners, executives, and self-employed professionals with misusing funds or submitting false applications.
If you’ve received a letter, subpoena, or visit from investigators about your PPP loan—or even suspect you might be under scrutiny—what you do next is critical. At Simmons & Wagner, our team of former Orange County District Attorneys has helped numerous clients respond to fraud allegations strategically, swiftly, and successfully.
Here’s what you need to know—and how to defend yourself if you’re being accused.
What Is PPP Loan Fraud?
PPP loan fraud occurs when someone knowingly provides false information or misuses funds obtained through the Small Business Administration’s Paycheck Protection Program. Common allegations include:
- Submitting false information on the loan application
- Inflating payroll or employee numbers
- Claiming non-existent businesses or employees
- Using PPP funds for unauthorized personal or luxury expenses
- Applying for multiple loans using different entities (aka “stacking”)
- Failing to use the funds for approved business expenses (like payroll, rent, or utilities)
The government is pursuing these cases aggressively, often using wire fraud, bank fraud, conspiracy, and false statement charges to secure convictions.
How Are People Being Investigated?
Federal agencies involved in PPP loan fraud investigations include:
- The FBI
- IRS Criminal Investigation Division
- Small Business Administration Office of Inspector General
- U.S. Attorney’s Office
- Department of Justice (DOJ) Fraud Section
You may be tipped off by:
- A letter requesting documents or repayment
- A subpoena for bank or payroll records
- A surprise visit or interview request
- An audit from the SBA
- A freeze on your bank account
If any of these happen to you, you are already on their radar—and the worst thing you can do is wait or go silent.
What Happens If You’re Charged?
PPP loan fraud is a federal offense, and convictions can lead to:
- Up to 30 years in prison (especially if bank fraud is involved)
- Hundreds of thousands in fines
- Restitution and asset forfeiture
- Permanent damage to your career and reputation
But not every accusation results in conviction—and not every mistake is criminal. That’s where your defense strategy becomes critical.
How to Defend Yourself Against PPP Loan Fraud Allegations
At Simmons & Wagner, we use our prosecutorial background to dismantle the government’s case and build a narrative that shows lack of intent, good faith, or reasonable reliance on others.
Common Defense Strategies Include:
Lack of Criminal Intent
Many PPP loan rules were evolving in real-time. If you misunderstood the criteria, relied on outdated guidance, or made an error without intent to deceive, this undercuts the government’s case.
Good Faith Reliance
If you worked with a CPA, loan officer, or financial advisor when applying for your PPP loan, we can argue that you acted in good faith based on expert advice.
Legitimate Business Purpose
We gather documentation to show your business was real, operational, and used funds for legitimate purposes—even if records were incomplete or inconsistently reported.
Procedural Violations
If agents overstepped during a search or interview—or violated your constitutional rights—evidence may be excluded from the case.
Why You Need a Former Prosecutor on Your Side
Federal PPP fraud investigations are handled by some of the most experienced prosecutors in the country. You need a defense team that understands the pressure, the process, and the stakes.
As former Orange County District Attorneys, we know how to:
- Communicate with prosecutors before charges escalate
- Position your case for pre-charge resolution or dismissal
- Mount a powerful trial defense if necessary
The government is moving fast. You need to move faster.
Contact Simmons & Wagner Today
If you’ve been accused of PPP loan fraud, don’t try to fix it yourself.
You need a legal team with experience, credibility, and a track record of success in high-stakes fraud cases.
Contact Simmons & Wagner now for a confidential consultation. We’ll protect your rights, build your defense, and fight for your future.