Arkansas PPP Loan Fraud Lawyers: Federal Defense in Little Rock

Arkansas PPP Loan Fraud Lawyers: Federal Defense in Little Rock

If your facing a PPP loan fraud investigation in Arkansas, you need to understand what your up against. The federal goverment has made pandemic relief fraud a top priority, and prosecutors in both the Eastern and Western Districts of Arkansas are aggressively pursuing cases. Between 2020 and 2024, the FBI Little Rock Field Office has opened hundreds of investigations, and many Arkansas business owners have already been sentenced to substantial prison time.

This isn’t just about paying back money—PPP fraud charges carry serious federal prison time. The Eastern District of Arkansas (Little Rock) and Western District of Arkansas (Fort Smith) have both seen significant prosecutions, with sentences that are getting longer each year. In 2024, Arkansas judges imposed sentences approximately 40% longer then those given in 2021-2022 for identical conduct.

Whether you recieved a target letter from the U.S. Attorney’s Office, your business is under investigation by the SBA Office of Inspector General, or the FBI has already executed a search warrant, you need experienced federal defense counsel immediately. The stakes couldn’t be higher, and the decisions you make right now will determine wether you face decades in prison or might successfully defend your case.

What Constitutes PPP Loan Fraud in Arkansas?

PPP fraud occurs when someone knowingly makes false statements on a Paycheck Protection Program loan application or uses the funds for unauthorized purposes. The CARES Act created these loans to help small businesses survive the pandemic, but it also created opportunities for fraud—and federal prosecutors have been relentless in pursuing cases.

Common Types of PPP Fraud Prosecuted in Arkansas Federal Courts

Based off recent prosecutions in the Eastern and Western Districts, here are the most common fraud schemes prosecutors target:

Fabricated Payroll Information: This is the most frequent type of PPP fraud we see in Arkansas. Business owners inflate payroll numbers, claim employees who don’t exist, or report wages that were never paid. The goverment calculates your PPP loan eligibility based on payroll, so any misrepresentation here is viewed as a direct theft of federal funds.

In one recent Eastern District case, a Little Rock woman submitted applications claiming her company paid $1,385,903 in wages during the first quarter of 2020. When investigators looked into it, they discovered the payroll figures was completely fabricated. She recieved a $1.5 million loan and was sentenced to 41 months in federal prison.

And look, here’s the thing—prosecutors don’t just look at what you wrote on the application. They subpoena your tax returns, payroll records, bank statements, and 941 forms. If the numbers don’t match, your facing serious problems. Between you and I, I’ve seen cases where business owners thought they could just “round up” their payroll figures, not realizing that even small misrepresentations can trigger criminal charges.

Misuse of Loan Proceeds: Even if you qualified for a PPP loan legitimately, using the money for unauthorized purposes is a federal crime. PPP funds were ment for payroll, rent, utilities, and other specific business expenses. Using the money for personal purchases—cars, jewelry, student loans, vacations—is fraud.

In the Little Rock case mentioned above, the defendant used $8,000 of her PPP funds to pay her personal student loan just two days after recieving the money. That single transaction was enough to prove fraudulent intent and support her conviction.

Bottom line: If you got PPP money, it doesn’t matter if you qualified legitamately. The second you use those funds for non-business purposes, your committing federal bank fraud.

Multiple Applications: Some Arkansas business owners submitted multiple PPP applications under different company names or EINs. The SBA’s fraud detection systems flagged many of these, and prosecutors view multiple applications as evidence of sophistacated fraud warranting longer sentences.

A Pine Bluff man was charged after allegedly submitting 18 seperate PPP applications seeking over $2.1 million. Multiple applications demonstrate a level of planning and intent that judges consider during sentencing, often resulting in significant upward departures from the Guidelines.

“Shelf” Companies: Creating shell companies or using dormant businesses to apply for PPP loans is another common scheme. Prosecutors in Fort Smith and Little Rock have prosecuted numerous cases where defendants created LLCs shortly before applying for PPP loans, then claimed these brand-new entities had substantial payroll and operating expenses.

The government can easily verify when your buisness was formed, when it opened bank accounts, and wether it had any actual operations. Shelf company schemes rarely succeed and usually result in aggravated fraud charges.

Identity Theft: Using other people’s identities or stolen personal information to apply for PPP loans adds additional federal charges. Each stolen identity used in a fraud scheme can result in seperate counts of aggravated identity theft under 18 U.S.C. § 1028A, which carries a mandatory consecutive 2-year prison sentence per count.

What Makes These Cases Federal Rather Then State Crimes?

PPP fraud is always a federal crime because the loans was backed by the federal Small Business Administration and funded with federal taxpayer money. Arkansas state prosecutors have no jurisdiction—these cases are prosecuted exclusivly in federal court by the U.S. Attorney’s Office.

That means your not appearing in Pulaski County Circuit Court or Sebastian County. Your case will be in the Eastern District of Arkansas (Richard Sheppard Arnold United States Courthouse in Little Rock) or the Western District of Arkansas (United States Courthouse in Fort Smith). Federal court operates under entirely differnt rules, procedures, and sentencing guidelines.

The Federal Investigation Process in Arkansas

Understanding how PPP fraud investigations unfold in Arkansas is crucial to mounting an effective defense. These investigations typically involve multiple federal agencies working together, and they often continue for months or even years before charges are filed.

Who Investigates PPP Fraud in Arkansas?

FBI Little Rock Field Office: The FBI coordinates most PPP fraud investigations statewide. There investigators have specialized training in financial crimes and work with forensic accountants to analyze bank records, tax returns, and loan applications. When the FBI gets involved, they’re building a criminal case—not just conducting a civil audit.

IRS Criminal Investigation (CI): IRS-CI agents get involved when PPP fraud intersects with tax fraud. If you claimed business expenses on your tax return that don’t match your PPP application, or if you failed to report PPP loan forgiveness properly, IRS-CI may join the investigation. These agents have extraordinary power to subpoena financial records, and there involvement significantly strengthens the government’s case.

SBA Office of Inspector General (OIG): The SBA OIG conducts audits and investigations of pandemic relief programs. There the ones who initially flag suspicious applications and refer cases to the FBI for criminal investigation. By the time the FBI contacts you, the SBA OIG has usually already completed substantial investigative work.

Department of Justice (DOJ) Criminal Division: The DOJ’s Criminal Division provides resources and coordination for major PPP fraud cases. For high-dollar fraud or complex schemes involving multiple defendants, DOJ trial attorneys may assist the local U.S. Attorney’s Office in prosecution.

Stages of a PPP Fraud Investigation

Stage 1: Initial Flagging (You Don’t Know Yet)

Your PPP application gets flagged by the SBA’s fraud detection algorithms or through a tip from a whistleblower, disgruntled employee, or business associate. At this stage, your completely unaware that anything is wrong. The SBA OIG begins a preliminary investigation, pulling your loan file and comparing it against IRS records, state employment databases, and other government data.

This is where most investigations begin, and its entirely invisible to you. You might think everything’s fine—your loan was approved, maybe even forgiven—while federal agents are quietly building a case.

Stage 2: Grand Jury Subpoenas (You Might Notice)

Once the SBA OIG identifies potential fraud, they refer the case to the FBI and the U.S. Attorney’s Office. Federal prosecutors present the case to a grand jury, which begins issuing subpoenas for records. You’re bank gets subpoenaed for account records. You’re payroll company gets subpoenaed. You’re accountant might get subpoenaed.

This is when many Arkansas business owners first realize something’s wrong—when there bank or accountant mentions that the federal goverment has subpoenaed records related to there business. Some people ignore these warning signs, which is a critical mistake.

Stage 3: Target Letter or Search Warrant (You Definately Know)

If prosecutors believe they have sufficient evidence, they’ll either send you a target letter or execute a search warrant. A target letter informs you that your the target of a federal criminal investigation and may be indicted. It usually invites you to cooperate or provide your side of the story.

Irregardless of what the letter says, DO NOT contact the prosecutor or FBI without an attorney. Anything you say will be used against you, and prosecutors aren’t interested in “hearing your side”—there trying to gather more evidence to strengthen there case.

In more serious cases, particularly those involving large loan amounts or multiple defendants, the FBI may execute a search warrant at you’re home or business. They’ll seize computers, phones, documents, and financial records. The presence of FBI agents at your door with a search warrant means your investigation has reached a critical stage.

Stage 4: Pre-Indictment Negotiations (Window of Oppurtunity)

After you recieve a target letter but before your indicted, there’s often a window for pre-indictment negotiations. An experienced federal defense attorney can sometimes negotiate with prosecutors to avoid charges altogether, reduce charges, or structure a cooperation agreement that minimizes you’re exposure.

This is the most critical stage. Once your indicted, your options become much more limited. 97% of federal fraud prosecutions resolve through plea agreements, but the terms of that agreement are much more favorable if negotiated before indictment.

Stage 5: Indictment and Arraignment (The Case Becomes Public)

If negotiations fail or if prosecutors decide to proceed, the grand jury returns an indictment. You’ll be arraigned in federal court—either the Eastern District in Little Rock or the Western District in Fort Smith. At arraignment, the judge will inform you of the charges, set bond conditions, and schedule future court dates.

Federal bond in fraud cases is usualy secured, but high-dollar fraud or flight risk concerns can result in detention. Once indicted, the case becomes public record, which often means media attention for larger cases.

Federal PPP Fraud Charges: 18 U.S.C. §§ 1343, 1344, 1014

Arkansas PPP fraud defendants typically face one or more of the following federal charges:

18 U.S.C. § 1343: Wire Fraud

Wire fraud is the most common charge in PPP cases. Section 1343 makes it a federal crime to use electronic communications—email, online applications, electronic bank transfers—to execute a fraud scheme.

Since virtually all PPP applications was submitted online and loan funds was transfered electronically, prosecutors charge wire fraud in almost every case. Each electronic transmission related to the fraud can be charged as a seperate count.

Elements Prosecutors Must Prove:

• You devised or participated in a scheme to defraud
• You acted with intent to defraud
• You used interstate wire communications in furtherance of the scheme
• The scheme involved material misrepresentations or omissions

Penalties: Wire fraud carries up to 20 years in federal prison per count. However, when the fraud affects a financial institution or involves federal disaster relief (which PPP loans do), the maximum increases to 30 years per count.

In practise, sentences rarely reach the statutory maximum. Federal sentencing guidelines calculate your actual sentence based on the loss amount, your role in the offense, and other factors. But make no mistake—even “small” PPP fraud cases regularly result in multi-year prison sentences.

18 U.S.C. § 1344: Bank Fraud

Bank fraud under Section 1344 applies when you knowingly executed a scheme to defraud a financial institution or obtained money from a financial institution through false pretenses. Since PPP loans was issued by banks and credit unions, submitting a fraudulent PPP application constitutes bank fraud.

Why Bank Fraud Carries Harsher Penalties:

Bank fraud is treated more seriously then most other fraud offenses because it threatens the stability of financial institutions and the banking system. Congress set the maximum penalty at 30 years—higher than wire fraud, mail fraud, or most other fraud statutes.

Arkansas prosecutors often charge both wire fraud AND bank fraud for the same conduct. This isn’t double jeopardy—courts have consistently held that defendants can be convicted of multiple fraud offenses arising from the same scheme, though sentences typically run concurrently.

Elements Prosecutors Must Prove:

• You knowingly executed or attempted to execute a scheme to defraud a financial institution
• You did so with intent to defraud
• The financial institution was federally insured (all PPP lenders was)

18 U.S.C. § 1014: False Statements to Financial Institutions

Section 1014 criminalizes making false statements to a financial institution. This includes providing false information on a loan application or in documents necessary for loan qualification.

The recent Supreme Court decision in Thompson v. United States clarified that Section 1014 doesn’t criminalize misleading yet literally true statements. If your PPP application statements was factually correct even if incomplete, you might have a defense. However, most PPP fraud cases involve outright false statements rather then mere omissions, so this defense has limited aplicability.

Penalties: Section 1014 carries up to 30 years in federal prison and fines up to $1 million.

18 U.S.C. § 1349: Conspiracy to Commit Fraud

If multiple people was involved in the PPP fraud scheme, prosecutors will often add conspiracy charges. Conspiracy is a seperate offense that can be charged even if the underlying fraud wasn’t completed.

Conspiracy is particularly dangerous because:

• Your responsible for the acts of your co-conspirators during the conspiracy
• Statements by co-conspirators can be used against you at trial
• The loss amount for sentencing purposes includes the total loss from the entire conspiracy, not just your individual portion
• Conspiracy carries the same maximum penalty as the underlying fraud offense

18 U.S.C. § 1028A: Aggravated Identity Theft

If you used another person’s identity or stolen personal information in your PPP fraud scheme, prosecutors will add aggravated identity theft charges. Section 1028A carries a mandatory consecutive 2-year prison sentence per count, meaning this time MUST be served in addition to any sentence for the underlying fraud.

Mandatory consecutive sentences can’t be reduced for acceptance of responsibility, cooperation, or any other mitigating factors. If your convicted of PPP fraud and three counts of aggravated identity theft, your serving at least six years in federal prison before any sentence for the underlying fraud.

Federal Sentencing Guidelines for PPP Fraud in Arkansas

Understanding federal sentencing is crucial for Arkansas defendants facing PPP fraud charges. Unlike state court, where judges have broad discretion, federal sentences are calculated using the United States Sentencing Guidelines—a complex system that produces relatively predictable sentencing ranges based on offense characteristics and criminal history.

How Federal Sentencing Works

The judge starts with the base offense level for fraud (typically Level 6 or 7) and then applies enhancements based on specific factors. The most significant enhancement is loss amount—the more money involved, the higher your sentence. After calculating the offense level and combining it with your criminal history category, the judge consults the Guidelines table to determine the sentencing range.

While the Guidelines are technically advisory after United States v. Booker, judges rarely depart significantly from them. In the Eastern and Western Districts of Arkansas, judges typically sentence within or slightly below the Guidelines range, particularly in fraud cases.

Loss Amount: The Primary Driver

The loss amount determines your base offense level enhancement. Here’s how it works for PPP fraud:

• Loss of $6,500 or less: No enhancement
• $6,500 – $15,000: +2 levels
• $15,000 – $40,000: +4 levels
• $40,000 – $95,000: +6 levels
• $95,000 – $150,000: +8 levels
• $150,000 – $250,000: +10 levels
• $250,000 – $550,000: +12 levels
• $550,000 – $1,500,000: +14 levels
• $1,500,000 – $3,500,000: +16 levels
• $3,500,000 – $9,500,000: +18 levels
• Over $9,500,000: +20 levels or more

For example, if you fraudulently obtained a $300,000 PPP loan, the loss amount enhancement is +12 levels. Starting from a base offense level of 7, your at level 19 before any other enhancements.

Common Enhancements in Arkansas PPP Cases

Number of Victims: If your fraud involved 10 or more victims, add 2 levels. For 50+ victims, add 4 levels. In PPP fraud cases, prosecutors sometimes argue that each taxpayer is a “victim” since PPP loans was funded by federal tax dollars, but courts have generally rejected this approach. However, if you used stolen identities or if multiple lenders was defrauded, these can count as victims.

Sophisticated Means: If the fraud involved sophisticated means (complex schemes, multiple entities, falsified documents), add 2 levels. Eastern and Western District judges frequently apply this enhancement in PPP cases involving shelf companies, fabricated payroll records, or multiple applications.

Financial Institution: If the offense affected a financial institution, add 2 levels. Since PPP loans was issued by banks and credit unions, this enhancement almost always applies.

Abuse of Position of Trust: If you occupied a position of trust and abused it to commit fraud, add 2 levels. This might apply if you was a CPA, attorney, or business consultant who helped others commit PPP fraud.

Leadership Role: If you organized, led, or managed a fraud scheme involving five or more participants, add 4 levels. If you was merely a manager or supervisor, add 3 levels. This enhancement significantly increases sentences for ringleaders of multi-defendant conspiracies.

Offense Level Reductions

Acceptance of Responsibility: If you clearly accept responsibility for your offense, you can earn a 3-level reduction (2 levels for acceptance, plus 1 additional level if you plead guilty before trial). This reduction typically translates to 6-12 months less prison time and is available in approximately 97% of cases that resolve through plea agreements.

However, you can’t claim acceptance of responsibility if you minimized your conduct, blamed others, or provided false information during the investigation. Judges in the Eastern District are particularly skeptical of defendants who initially lied to investigators but later accepted responsibility only after overwhelming evidence emerged.

Minor Role: If your role in the offense was minor compared to other participants, you can earn a 4-level reduction. If your role was minimal, you can earn a 2-level reduction. These reductions are difficult to obtain in PPP cases where you was the loan applicant, since prosecutors argue you was a central participant.

Criminal History Category

Your criminal history category (I through VI) is calculated based on prior convictions. Each prior sentence generates criminal history points:

• 3 points for each prior sentence exceeding 1 year and 1 month
• 2 points for each prior sentence of at least 60 days
• 1 point for each prior sentence of less then 60 days

Most first-time offenders have a criminal history category of I, which results in lower sentences. However, if you have prior fraud convictions or a substantial criminal record, you could be category III, IV, or higher, dramatically increasing your sentence.

Sample Sentencing Calculations

Example 1: Small PPP Fraud ($50,000 loan, first offense)

• Base offense level: 7
• Loss amount ($40,000-$95,000): +6 levels
• Financial institution involved: +2 levels
• Acceptance of responsibility: -3 levels
• Total offense level: 12
• Criminal history category: I
• Guidelines range: 10-16 months

Example 2: Moderate PPP Fraud ($300,000 loan, first offense, sophisticated means)

• Base offense level: 7
• Loss amount ($250,000-$550,000): +12 levels
• Financial institution involved: +2 levels
• Sophisticated means: +2 levels
• Acceptance of responsibility: -3 levels
• Total offense level: 20
• Criminal history category: I
• Guidelines range: 33-41 months

Example 3: Large PPP Fraud ($1.5 million loan, multiple applications, prior fraud conviction)

• Base offense level: 7
• Loss amount ($1,500,000-$3,500,000): +16 levels
• Financial institution involved: +2 levels
• Sophisticated means: +2 levels
• Number of victims (10+): +2 levels
• Acceptance of responsibility: -3 levels
• Total offense level: 26
• Criminal history category: III (due to prior conviction)
• Guidelines range: 78-97 months (6.5-8 years)

These examples show why loss amount is so critical. The diffrence between a $50,000 fraud and a $300,000 fraud is the diffrence between roughly one year in prison versus three years. And large-scale fraud with prior convictions can result in sentences approaching a decade.

Restitution and Forfeiture

In addition to prison time, Arkansas PPP fraud defendants must pay restitution—full repayment of the fraudulently obtained funds. If you spent the money, the restitution order remains in effect indefinately and can be enforced through wage garnishment, asset seizure, and liens on property.

The goverment will also seek forfeiture of any assets traceable to the fraud, including cash, vehicles, real estate, and other property purchased with PPP funds. Even if you transferred assets to family members or sold them, prosecutors can trace the funds and seize equivalent property.

Defense Strategies for Arkansas PPP Fraud Cases

Defending a federal PPP fraud case requires experienced counsel familiar with both federal criminal procedure and the specific issues surrounding pandemic relief programs. Here are the most effective defense strategies we use in Arkansas PPP cases:

Challenge the Loss Amount

Since loss amount drives sentencing, one of the most important defense tasks is challenging the goverment’s loss calculation. Prosecutors often inflate loss figures by including amounts that was never actually obtained, including interest and fees, or claiming theoretical losses rather then actual losses.

In PPP cases, the loss amount should be limited to the actual loan proceeds you recieved, not the amount you applied for if the application was denied or reduced. If some of the funds was used for legitimate business purposes, we argue for a reduced loss amount based only on the misused portion.

For example, if you recieved a $200,000 PPP loan but only $50,000 was used for unauthorized personal expenses while the remaining $150,000 went to actual payroll, we argue the loss is $50,000, not $200,000. This could reduce your sentence from 33-41 months to just 10-16 months.

Challenge Intent

Federal fraud requires proof that you acted with intent to defraud. Mistakes, misunderstandings, and negligent misrepresentations are not sufficient for criminal liability. If you genuinly believed your PPP application was accurate or if you reasonably relied on an accountant’s or attorney’s advice, you may have a defense based on lack of intent.

In one Eastern District case, we successfully argued that our client relied on his accountant’s payroll calculations and genuinely believed the PPP application was accurate. While the numbers was wrong, the client lacked the specific intent to defraud, which is required for conviction. The case was resolved with no jail time.

Challenge Materiality

The government must prove that any false statements on your PPP application was material—meaning they were capable of influencing the lender’s decision. If the misstatement was minor or if you qualified for the loan anyway even without the false statement, you may have a materiality defense.

For example, if you inflated your payroll from $90,000 to $100,000 but you qualified for the same loan amount based on the actual $90,000 figure, the misstatement wasn’t material. This defense is difficult but not imposible, particularly in cases involving small discrepancies.

Good Faith Reliance on Professional Advice

If you relied on an accountant, attorney, or business consultant who prepared your PPP application, you may have a good faith reliance defense. This requires showing that: (1) you made full disclosure to the professional, (2) you sought advice as to the legality of your conduct, (3) you received advice that your conduct was legal, and (4) you relied on that advice in good faith.

This defense doesn’t work if you simply hired someone to fill out forms without providing accurate information. But if you gave your accountant complete records and relied on their professional judgment in calculating payroll figures, this can negate criminal intent.

Negotiate a Pre-Indictment Resolution

In many Arkansas PPP fraud investigations, the best defense strategy isn’t fighting the charges at trial—its negotiating a favorable resolution before indictment. Once the government has invested resources in obtaining an indictment, prosecutors are much less willing to consider alternatives to prosecution.

Pre-indictment negotiations can result in:

• Declination of prosecution in exchange for full restitution
• Reduced charges (e.g., misdemeanor instead of felony)
• Agreement to recommend a specific sentencing range
• Deferred prosecution agreement or pre-trial diversion

These options are almost never available after indictment. The window for pre-indictment negotiations is narrow—usually 30-60 days after receiving a target letter—and requires experienced counsel who knows how to present your case persuasively to federal prosecutors.

Cooperation and Substantial Assistance

If you have information about other individuals involved in PPP fraud, you may be able to negotiate a cooperation agreement. Under Federal Rule of Criminal Procedure 35(b), defendants who provide substantial assistance to the government can receive downward departures from the Guidelines, sometimes reducing sentences by 50% or more.

Cooperation is a complex decision that requires careful analysis. You need to provide information that leads to the prosecution of others, testify truthfully if required, and maintain complete honesty throughout the cooperation process. Proffer sessions with prosecutors are protected by Rule 11 agreements, but anything you say can be used against you if you later go to trial rather then plead guilty.

Mitigation: Telling Your Story

Even if you can’t avoid conviction, effective mitigation can significantly reduce your sentence. Federal judges consider numerous factors beyond the Guidelines, including:

• Your personal history and characteristics
• The circumstances that led to the offense
• Financial hardship or business struggles during the pandemic
• Lack of criminal history
• Community ties and family responsibilities
• Employment history and prospects
• Charitable work and community contributions

Presenting compelling mitigation requires more than just telling the judge you’re sorry. We prepare detailed sentencing memoranda with supporting documentation, letters from family and community members, evidence of rehabilitation, and expert testimony when appropriate.

In one recent Western District case, we represented a Fayetteville business owner who obtained a fraudulent $180,000 PPP loan. The Guidelines range was 30-37 months. Through comprehensive mitigation—showing the severe financial impact of the pandemic on his business, his lack of criminal history, his community contributions, and his genuine remorse—we obtained a sentence of 18 months, a substantial downward departure.

Why You Need an Arkansas Federal Defense Lawyer

PPP fraud cases are federal prosecutions, which means they’re fundamentally different from state criminal cases. You need an attorney with specific experience in federal court, preferably someone who has handled fraud cases in the Eastern or Western District of Arkansas.

Federal Court Is Different

Federal court operates under the Federal Rules of Criminal Procedure, Federal Rules of Evidence, and United States Sentencing Guidelines—none of which apply in Arkansas state court. Many excellent state criminal defense attorneys have limited or no federal experience, and the differences can be critical.

Federal prosecutors are career attorneys with substantial resources, including FBI agents, forensic accountants, and unlimited time to build their case. They have a 93% conviction rate at trial. Going up against the federal government without experienced federal counsel is a recipe for disaster.

Timing Is Critical

The decisions you make in the first 48 hours after learning you’re under investigation can determine the outcome of your case. Many Arkansas business owners make critical mistakes during this window:

• Talking to FBI agents without an attorney. Anything you say will be used against you, and agents are skilled at eliciting incriminating statements. Even if you think you’re explaining your side of the story, you’re providing evidence for prosecution.
• Destroying documents or deleting electronic records. This is obstruction of justice, a separate federal crime that adds years to your sentence. The FBI can recover deleted files, and attempting to destroy evidence demonstrates consciousness of guilt.
• Continuing to use PPP funds improperly. Some business owners continue spending fraudulent PPP money even after learning they’re under investigation, thinking they’re “already in trouble anyway.” This increases the loss amount and demonstrates ongoing criminal conduct.
• Failing to preserve exculpatory evidence. Documents, communications, and records that support your defense can be lost if not immediately preserved. An experienced federal attorney knows what evidence to secure and how to preserve it.

Local Experience Matters

While federal law is the same across the country, local practice matters enormously. The judges in the Eastern District of Arkansas have different tendencies then those in the Western District. Some judges are more willing to depart downward from the Guidelines; others strictly adhere to them. Some are skeptical of cooperation agreements; others value them highly.

An attorney who regularly practices in the Eastern and Western Districts knows the judges, understands local procedures, and has relationships with the U.S. Attorneys handling these cases. This knowledge is invaluable in crafting an effective defense strategy.

The Consequences of Going It Alone

We’ve seen Arkansas business owners try to handle federal investigations themselves, and the results are uniformly disastrous. Some thought they could “explain the situation” to the FBI and make the investigation go away. Others believed hiring an attorney would make them “look guilty.” Some simply couldn’t afford legal representation and hoped for the best.

In every single case, these defendants received substantially longer sentences then they would have with competent counsel. They made statements that destroyed potential defenses, failed to negotiate pre-indictment resolutions, and received no mitigation credit at sentencing.

Federal charges aren’t something you handle yourself. The stakes are too high, and the consequences are too severe.

What to Do If You’re Under Investigation

If you believe you’re under investigation for PPP fraud in Arkansas, take these steps immediately:

1. Do not speak to federal agents, investigators, or prosecutors without an attorney. Politely decline to answer questions and state that you wish to speak to an attorney first. You have an absolute right to remain silent and to have counsel present during any questioning.
2. Do not destroy any documents or delete any electronic records. This includes emails, text messages, bank records, loan applications, payroll records, tax returns, and business records. Destruction of evidence is a separate federal crime.
3. Do not discuss the investigation with anyone except your attorney. Conversations with friends, family members, business associates, and co-workers are not privileged and can be discovered by investigators. Only communications with your attorney are protected.
4. Hire an experienced federal criminal defense attorney immediately. Contact an attorney with specific experience handling federal fraud cases in Arkansas. The attorney should be familiar with the Eastern and Western Districts and should have relationships with the U.S. Attorneys offices in Little Rock and Fort Smith.
5. Preserve all potentially relevant evidence. Your attorney will advise you on what needs to be preserved and how to organize it for your defense.
6. Stop any ongoing misuse of PPP funds. If you’re still spending fraudulent PPP money, stop immediately. Continuing to use the funds increases your exposure and demonstrates ongoing criminal intent.
7. Do not make any additional false statements. If investigators ask about your PPP loan and you lie, you’re committing additional crimes. Silence is your right; lying is a crime.

Conclusion: Arkansas PPP Fraud Defense Requires Immediate Action

If your under investigation for PPP loan fraud in Arkansas—whether in Little Rock, Fort Smith, Fayetteville, Springdale, Jonesboro, Pine Bluff, or anywhere in the state—you’re facing serious federal charges that can result in years in federal prison. The U.S. Attorney’s Offices for the Eastern and Western Districts of Arkansas are aggressively prosecuting these cases, and sentences are getting longer each year.

But having charges filed against you doesn’t mean your going to prison. With experienced federal defense counsel, many Arkansas business owners have successfully negotiated favorable resolutions, reduced charges, and significantly lower sentences. Some have avoided prosecution altogether through pre-indictment negotiations.

The key is acting immediately. Every day you wait, the goverment’s case gets stronger, and your options become more limited. Don’t make the mistake of thinking this will blow over or that you can handle it yourself. Federal PPP fraud investigations don’t go away, and they rarely end well for unrepresented defendants.

Contact an experienced Arkansas federal criminal defense attorney today. Your freedom, your livelihood, and your future depend on the decisions you make right now.