PPP and loan fraud
A PPP or loan fraud case accuses a person of lying to get a loan: about payroll, employees, revenue, or how the money would be used. These are almost always federal cases, and many begin with a call from an agent or a letter, long after the loan was paid out. Do not explain the application to anyone but your own lawyer.
What the charge means
Loan fraud cases focus on the application. The government compares what was written about payroll, employees, revenue and the use of the money with bank records, tax filings and what was actually spent. The central question is usually whether a false statement was made knowingly, not by mistake or on someone else's bad advice.
Federal court
These cases are brought in federal court. The charges prosecutors use include:
- False statements on a loan or credit application: knowingly making a false statement or report to influence the lenders and federal bodies the statute lists [1]. Whether it applies to a particular PPP loan depends on the facts and the lender, and your lawyer reads the exact charge.
- Wire fraud: a scheme or artifice to defraud carried out using wire, radio or television communication in interstate or foreign commerce, such as online applications and electronic transfers [2].
- Conspiracy under the general statute, 18 U.S.C. § 371: two or more people agreeing to commit an offense against the United States or to defraud it, plus at least one act to carry it out [3].
A federal felony must be charged by grand jury indictment unless the defendant waives it in open court and the case goes forward by information [4]. Many PPP cases surface first as a target letter or a subpoena for records.
What to do now
- Do not talk to agents, the lender or the SBA about the loan without a lawyer.
- Keep every record: the application, payroll and tax files, bank statements and emails with anyone who helped.
- Do not contact the preparer, employees or partners about the investigation.
- If you received a letter or a subpoena, bring it and the envelope to your lawyer.
For the steps ahead, use What happens next or the federal court page.
Common questions
My accountant or broker filled out the application. Does that matter?
It may. Tell your lawyer exactly who prepared what, and gather every version and email. Do not contact the preparer about the investigation yourself.
Should I pay the loan back now?
Talk to a lawyer before you repay, refinance or contact the lender. How that step is taken can matter.
Sources
- 18 U.S.C. § 1014. Current as of November 11, 2026. Official text
- 18 U.S.C. § 1343. Current as of November 11, 2026. Official text
- 18 U.S.C. § 371. Current as of November 11, 2026. Official text
- Fed. R. Crim. P. 7(a)(1), (b); U.S. Const. amend. V. Current as of November 11, 2026. Official text
Arrested, or think you might be? Call before you answer any questions.
Call and tell us who was arrested or contacted and where the case is. A lawyer will tell you what happens next and what to do tonight. Please do not type what happened into a form or an email. We will talk about it on the phone.