Florida PPP Loan Fraud Lawyers: Federal Defense in Miami, Tampa, Jacksonville, and Orlando

Florida PPP Loan Fraud Lawyers: Federal Defense in Miami, Tampa, Jacksonville, and Orlando

You opened your mail and there it was—a letter from the Small Business Administration saying your PPP loan isn’t eligible for forgiveness. Or maybe FBI agents showed up at you’re business with a subpoena for financial records. Or perhaps your just panicking because you realize the way you used those funds doesn’t exactly match what you put on the application. Whatever brought you here, your Googling “Florida PPP fraud lawyer” because you understand this isn’t a civil matter—this is potential federal criminal exposure.

Here’s what you need to know right now: Florida has prosecuted more PPP fraud cases than any other state in the nation. The Southern District of Florida (Miami), Middle District (Tampa/Orlando), and Northern District (Tallahassee) have collectively charged over 1,200 defendants since 2020. The average sentence for convicted defendants in Florida is 38 months in federal prison—and that doesn’t include the fines, restitution, asset forfeiture, and professional consequences that follow you for life.

The federal statutes prosecutors use carry serious time: up to 20 years for wire fraud under 18 USC § 1343, up to 30 years for bank fraud under 18 USC § 1344, and up to 30 years for making false statements to financial institutions under 18 USC § 1014. These aren’t empty threats—Florida federal courts have imposed sentences ranging from probation to 17.5 years depending on the loss amount and the defendant’s conduct.

Look, here’s the deal: if you recieved that SBA “Not Eligible for Forgiveness” letter, you’re in what defense attorneys call the 60-day window. Within 60 to 120 days after the SBA sends that letter, defendants typically recieve grand jury subpoenas or target letters from the U.S. Attorney’s Office. This is the most critical period for intervention—not after your charged, but before. And yes, the government is still actively investigating PPP fraud cases in 2025. The statute of limitations was extended from 5 years to 10 years for COVID-19 relief fraud, which means prosecutors have until 2030-2033 to file charges on loans obtained in 2020-2023.

This article explains what you’re actually facing, how Florida federal courts handle PPP fraud cases differantly than other states, and what you need to do right now to protect yourself. We’ll cover the timeline from SBA audit to sentencing, the defenses that work (and the ones that definately don’t), and the Florida-specific threats that out-of-state attorneys might miss.

Do I Actually Need a Federal Defense Attorney?

Maybe you’re thinking, “It was just a mistake on the payroll numbers” or “I’ll just pay back the loan and this will go away.” That kind of thinking is exactly how defendants turn managable situations into federal indictments. The single biggest mistake PPP fraud targets make is treating the SBA audit like a civil matter and responding without criminal defense counsel.

Here’s the thing—their are essentially two tracks your case can take. Track one is administrative: the SBA reviews your loan, determines you weren’t eligible or misused funds, demands repayment, maybe imposes civil penalties. No criminal charges. Track two is criminal: the SBA Office of Inspector General refers your case to the Department of Justice, the FBI opens an investigation, and your facing federal felony charges. The difference between these tracks often comes down to how you handle the initial SBA inquiry.

When the SBA sends an audit letter or requests documentation about you’re loan, they’re already suspicious. They’ve identified discrepancies—maybe your 2019 IRS Schedule C shows $40,000 in net profit but your PPP application claimed $120,000 in payroll expenses. Or your bank records show you withdrew $50,000 in cash three days after the loan was deposited. Or you applied for loans from multiple lenders using the same EIN. Whatever triggered the audit, the SBA has contract forensic accountants (firms like Eide Bailly, CliftonLarsonAllen, and Grant Thornton) who analyze your financial records and prepare detailed reports.

Here’s what most people don’t understand: that forensic accountant’s report is what drives the prosecution decision. FBI agents don’t independently verify the accounting—they rely on the OIG forensic report. If the report concludes you submitted false information and misused funds, the case gets referred for criminal prosecution. If the report shows discrepancies but also shows good faith efforts to comply, the case might stay administrative. You have 30-45 days after recieving the audit letter to respond before the forensic accountant finalizes thier report. This is your best chance to prevent criminal charges, and you only get one shot at it.

The “$150,000 threshold” is somthing prosecutors don’t advertise but defense attorneys recognize. Analysis of DOJ press releases from Florida’s three federal districts shows that 89% of prosecuted cases involve loans over $150,000. Why? Prosecutorial economics. The cost of prosecution—FBI investigation, forensic accounting, grand jury presentation, trial preparation—is substantial. For a $75,000 loan where the defendant has a legitamate business and the issues are marginal (maybe they misclassified some expenses or slightly inflated payroll), the cost-benefit doesn’t favor prosecution. AUSAs prioritize high-dollar cases or cases with aggravating factors like fake businesses, luxury purchases, or multiple fraudulent loans.

This doesn’t mean loans under $150,000 are safe—plenty of defendants with smaller loans have been prosecuted when the facts were egregious. But if you’re loan is under $150K and you have a legitimate business that was operational before February 15, 2020, you have strong leverage for administrative resolution. If your loan is over $150K, prosecution is much more likely irregardless of whether your business was legitimate.

Another common mistake: thinking that repaying the loan will make the criminal case go away. It won’t. Deputy Attorney General Lisa Monaco’s March 2022 memo makes clear that repayment is a sentencing factor, not a bar to prosecution. Prosecutors view voluntary repayment favorably at sentencing—it can reduce your guideline range by demonstrating acceptance of responsibility. But it doesn’t prevent them from filing charges. Defendants who unilaterally repay loans without securing non-prosecution agreements waste money and still face indictment.

So do you need a federal defense attorney? If any of the following apply, the answer is yes:

• You recieved an SBA audit letter or request for documentation
• You received a grand jury subpoena
• FBI or SBA OIG agents contacted you
• Your loan was over $150,000
• You applied for multiple PPP loans
• The business on your application wasn’t operational before February 15, 2020
• You used loan funds for non-payroll expenses (rent, utilities, vehicles, personal use)
• Your 2019 tax returns don’t support the payroll numbers on your application

Timeline: What Happens After the SBA Letter

Understanding where you are in the process is critical because different phases require different strategies. Here’s how a typical Florida PPP fraud case unfolds from initial audit to sentencing.

Phase 1: SBA Audit and Forensic Review (30-45 days)

The Small Business Administration flags your loan for review based on automated screening (comparing PPP applications to IRS records, looking for duplicate EINs, identifying businesses that didn’t exist in 2019) or based on complaints from whistleblowers, bank fraud departments, or other sources. You recieve a letter requesting documentation: 2019 and 2020 tax returns, payroll records, bank statements, Form 941 quarterly payroll tax filings, proof of business operations.

During this phase, a contract forensic accountant reviews you’re submissions and prepares a report. This is the most important phase for intervention. If you can demonstrate that the discrepancies were unintentional, provide correcting documentation, and show good faith, you may avoid criminal referral. The accountant is looking for specific red flags: payroll numbers that don’t match tax filings, no evidence of employees, fund transfers to personal accounts, luxury purchases, cash withdrawals.

Many defendants make critical mistakes during this phase: they provide incomplete documentation, they offer explanations that contradict thier tax returns, or they don’t respond at all. Each of these outcomes makes criminal referral more likely. A defense attorney can work with forensic accountants and tax professionals to present your case in the best light and identify legitimate explanations for discrepencies before the OIG report is finalized.

Phase 2: OIG Criminal Referral Decision (60-90 days after audit)

If the forensic report concludes that you submitted false information and misused funds, the SBA Office of Inspector General refers the case to the U.S. Attorney’s Office in your district. In Florida, that means the Southern District (Miami), Middle District (Tampa/Orlando), or Northern District (Tallahassee) depending on where you are located or where the bank that processed your loan is located.

The referral package includes the forensic accountant’s report, your loan application and supporting documents, bank records, and any statements you made during the audit. At this point, the case transitions from administrative to criminal. You won’t necessarily know this has happened—the SBA doesn’t notify you that they’ve made a criminal referral.

Phase 3: FBI Investigation (6-18 months)

An FBI agent is assigned to investigate you’re case. The agent reviews the OIG referral, interviews witnesses (your bank, employees, business partners, accountants), subpoenas additional records (emails, phone records, business formation documents), and builds the case. In some cases, the FBI will attempt to interview you. Do not speak to FBI agents without an attorney present, even if they say it’s just an “informal conversation” or they’re “giving you a chance to explain your side.” Anything you say will be used against you, and statements made to federal agents can form the basis for additional charges under 18 USC § 1001 (false statements to federal officers).

This is also when prosecutors decide what charges to file. Wire fraud under 18 USC § 1343 is the most common because PPP applications were submitted electronically. Bank fraud under 18 USC § 1344 is added when the loan went through a federally insured bank (which is almost always). False statements under 18 USC § 1014 applies to the SBA Form 2483 application itself. If multiple people were involved, conspiracy charges under 18 USC § 371 may be added.

Federal prosecutors apply the “willful blindness” doctrine to prove intent in PPP fraud cases. Under United States v. Jewell, 532 F.2d 697, a defendant can’t avoid criminal liability by deliberately avoiding knowledge of the truth. In practise, this means claiming “I didn’t know the information on my application was false” doesn’t work if prosecutors can show you signed the application without checking the numbers, relied on an accountant without verifying the information, or had reason to know the statements were false but chose not to investigate.

The willful blindness instruction allows prosecutors to secure convictions even when they can’t prove the defendant had actual knowledge that the application contained false information. Florida federal courts have applied this doctrine in 15+ PPP fraud cases since 2021, rejecting defenses based on reliance on accountants, loan brokers, or business partners.

Phase 4: Grand Jury Subpoena or Target Letter (18-24 months from audit)

Eventually, you recieve a grand jury subpoena (requiring you to produce documents or testify) or a target letter (informing you that your the subject of a grand jury investigation and may be indicted). A target letter sometimes includes an invitation to “cooperate” or provide information before charges are filed. This is a critical decision point—cooperating at this stage might result in reduced charges or a plea agreement before indictment, but it also involves waiving certain rights. Do not make this decision without experienced defense counsel.

Grand jury subpoenas require careful handling. If you recieve a subpoena for documents, responding improperly—providing incomplete documents, destroying documents, or producing documents that contradict earlier statements—can result in additional charges for obstruction of justice. If your subpoenaed to testify, you have Fifth Amendment rights against self-incrimination, but invoking those rights in a grand jury has strategic implications that need to be discussed with your attorney.

Phase 5: Indictment or Plea Negotiation

The grand jury returns an indictment charging you with wire fraud, bank fraud, false statements, or conspiracy. At this point, you have two paths: negotiate a plea agreement or proceed to trial. Most federal PPP fraud cases (approximately 95%) resolve through plea agreements becuase the evidence—your signed application, bank records showing fund misuse, tax returns contradicting your claimed payroll expenses—is often overwhelming.

Plea negotiations involve discussions with the Assistant U.S. Attorney about what charges you’ll plead guilty to, what sentencing recommendations the government will make, and whether you’ll provide substantial assistance (cooperation) that qualifies you for a downward departure under USSG § 5K1.1. These negotiations are where experienced federal defense counsel make the biggest difference—knowing what concessions AUSAs in you’re district typically make, understanding the sentencing guidelines, and presenting mitigation evidence that impacts the government’s position.

The Florida Double Jeopardy Problem

If your facing PPP fraud charges in Florida, you have a problem that defendants in most other states don’t face: you can be prosecuted twice for the same conduct. The dual sovereignty doctrine—established in Heath v. Alabama, 474 U.S. 82 (1985)—allows both federal and state governments to prosecute you for the same conduct because they are seperate sovereigns. Florida is one of the few states that has aggressively pursued state-level PPP fraud prosecutions in addition to federal cases.

Florida Attorney General Ashley Moody established the “Florida COVID-19 Fraud Task Force” in 2021, and it’s still active in 2025. Under Florida Statute § 817.034 (criminal use of personal identification information), state prosecutors can charge defendants who used fake employee names, stolen Social Security numbers, or fabricated business identities on PPP applications. They can also charge grand theft under Florida Statute § 812.014 for obtaining money through fraud.

Here’s how this plays out in practise: your prosecuted in federal court in the Southern District of Florida for wire fraud and bank fraud based on your PPP application. You negotiate a plea deal, plead guilty, and recieve 36 months in federal prison. You think the case is over. Then the Miami-Dade State Attorney’s Office files state charges under Florida Statute § 817.034 for using false identification information on the same application. The Double Jeopardy Clause of the Fifth Amendment does not protect you because federal and state prosecutions are considered seperate proceedings.

This isn’t theoretical—it’s happening. Since 2021, Miami-Dade, Hillsborough County (Tampa), and Orange County (Orlando) prosecutors have filed state charges against more then 40 defendants who were already facing or had already resolved federal PPP fraud charges. In some cases, defendants who negotiated favorable federal plea deals (probation or short sentences based on acceptance of responsibility and low loss amounts) ended up serving significant state prison time based on the same conduct.

Real talk—this is something alot of federal defense attorneys miss if they don’t regularly practise in Florida. A lawyer from New York or California handling a Florida PPP case might not be aware of the state prosecution risk and might negotiate a federal plea deal without considering the state exposure. A Florida attorney who handles both federal and state white-collar cases understands that you need to address both jurisdictions simultaneously, ideally coordinating with both the federal AUSA and the state prosecutor to resolve all charges together.

The strategic implications are significant. If you plead guilty in federal court and make statements in your plea allocution (the statement you give to the judge admitting what you did), those statements can be used against you in state court. If you cooperate with federal investigators and provide statements about your conduct, those statements may be shared with state prosecutors. Every decision you make in the federal case has to be evaluated with the state case in mind.

Why is Florida so aggressive on PPP fraud compared to other states? Multiple reasons. Florida had the highest rate of PPP fraud per capita—the combination of international business ties (especially in Miami), a large population of business owners, and sophisticated fraud rings made Florida the epicenter of PPP fraud. The state’s political leadership viewed PPP fraud as a high-priority issue, and both Republican and Democratic administrations have supported aggressive prosecution. And frankly, PPP fraud cases are easier for state prosecutors then traditional white-collar cases like securities fraud or embezzlement—the evidence is straightforward, the statutes are clear, and public sentiment supports prosecution.

Bottom line: if your facing PPP fraud charges in Florida, you need an attorney who understands dual sovereignty and has relationships with both federal and state prosecutors. That might mean co-counsel (a federal practitioner working with a Florida state practitioner), or it might mean an attorney who regularly handles both. But you can’t afford to address the federal case in isolation and hope the state doesn’t file charges.

What the Feds Are Actually Looking For

Understanding what evidence prosecutors use helps you assess you’re actual exposure. PPP fraud cases aren’t about complicated financial schemes—their about basic discrepencies between what you claimed on your application and what the documents show. Here are the red flags that trigger investigations and the evidence that drives prosecutions.

IRS Schedule C vs. PPP Payroll Numbers

This is the most common discrepancy in Florida PPP fraud cases. On your 2019 IRS Schedule C (Profit or Loss from Business), Line 31 shows your net profit—which for sole proprietors, is effectively your income from the business. The PPP loan amount was calculated based on 2.5 months of average monthly payroll. For sole proprietors with no employees, that should have been capped at $20,833 (2.5 x $8,333 monthly maximum based on the $100,000 annual cap).

But many applicants claimed far more. They reported $150,000, $200,000, even $300,000 in payroll expenses when thier Schedule C showed they had no employees and net profit of $40,000. The math doesn’t work. Forensic accountants compare Line 31 of your Schedule C to the payroll expenses you claimed on the PPP application. If the numbers don’t match, that’s evidence of false statements under 18 USC § 1014.

For businesses with employees, the comparison is between your Form 941 quarterly payroll tax filings and the payroll numbers on you’re PPP application. Form 941 reports the actual wages you paid and the payroll taxes you withheld each quarter. If your PPP application claimed $200,000 in quarterly payroll but your 941 forms show $80,000, that’s a problem. Prosecutors will argue you inflated the numbers to get a larger loan.

Bank Account Analysis

The CARES Act required PPP funds be used for specific purposes: payroll costs (at least 60%), rent, utilities, and mortgage interest. Prosecutors subpoena bank records for the account where the PPP loan was deposited and analyze every transaction for 8-24 weeks after the deposit. They’re looking for: cash withdrawals, transfers to personal accounts, purchases of vehicles or real estate, luxury purchases (jewelry, designer clothing, travel), payments to credit cards for personal expenses, gambling transactions.

One of the highest-profile Florida cases involved David T. Hines, who obtained $3.9 million in PPP loans for multiple businesses and then bought a Lamborghini, stayed at luxury hotels, and went shopping at high-end retailers. His bank records showed almost none of the funds went to payroll—they went to personal expenses. He was sentenced to 78 months in federal prison. His case became a template for how prosecutors use bank records to prove misuse.

Even if you didn’t buy a Lamborghini, smaller discrepencies matter. If you withdrew $20,000 in cash and can’t explain what business purpose it served, prosecutors will argue it was personal use. If you transferred funds to your personal account and then used them for non-business expenses, that’s misuse. The burden is on you to show that the funds were used consistently with the CARES Act—and if you can’t document it, prosecutors will assume the worst.

Multiple EIN Applications and Loan Stacking

Some defendants applied for multiple PPP loans using different business names but the same underlying operation. This is called “loan stacking,” and it’s one of the aggravating factors that increases sentences. The SBA’s automated systems flagged applications with: the same business address used by multiple applicants, the same bank account used for multiple loans, the same IP address submitting multiple applications, the same phone number or email on multiple applications.

Prosecutors argue that defendants who applied for multiple loans knew they weren’t eligible for all of them and were intentionally defrauding the program. Even if each individual loan was under the $150,000 threshold, the aggregate amount across all loans is what matters for prosecution decisions and sentencing calculations.

No Payroll Tax Filings

If you claimed you had employees and payroll expenses, you should have been filing Form 941 quarterly payroll tax returns with the IRS. If you weren’t filing 941 forms, that’s strong evidence that you didn’t actually have employees and the payroll numbers on you’re application were false. Prosecutors use the absence of 941 filings as proof of fraud.

Some defendants argue they paid employees in cash and didn’t file payroll taxes. That doesn’t help your case—it means you were committing employment tax fraud in addition to PPP fraud. And it doesn’t explain how you calculated the payroll numbers on your application if you weren’t keeping proper records.

Business Didn’t Exist Before February 15, 2020

The CARES Act required that businesses be in operation on February 15, 2020 to qualify for PPP loans. Prosecutors subpoena business formation documents (articles of incorporation, LLC filings, business licenses) to determine when your business was actually established. If your business was formed after February 15, 2020, you weren’t eligible—period. Defendants who submitted fake business documents (backdated formation papers, fabricated licenses) face additional charges for document fraud.

Forgiveness Application Inconsistencies

Here’s somthing most people don’t realize: the loan forgiveness application (SBA Form 3508) creates a second opportunity for fraud charges. When you apply for forgiveness, you certify under penalty of perjury that the loan funds were used for eligible expenses. If the forgiveness application contains false statements—for example, you claim you used the funds for payroll when bank records show you didn’t—that’s a separate violation of 18 USC § 1014.

Prosecutors have filed charges 18-24 months after loan forgiveness was approved, using the forgiveness application as the basis for charges. Defendants think, “The loan was forgiven, so I’m safe.” But forgiveness doesn’t mean the government verified that your statements were true—it means they approved your application based on the information you provided. If they later discover the information was false, forgiveness doesn’t protect you from prosecution. In fact, because the statute of limitations runs from the date of the last false statement, filing a false forgiveness application in 2022 extends the prosecution window until 2032.

Defenses That Don’t Work in Florida Federal Court

Before we talk about what does work, you need to understand what doesn’t. Florida federal courts have heard every possible PPP fraud defense over the past four years, and some defenses fail consistently. Pursuing a failed defense wastes time, money, and credibility with prosecutors—and it can result in harsher sentences when judges view your defense as lacking acceptance of responsibility.

“My Accountant Prepared the Application”

This is the most common defense, and it almost never works. The argument goes like this: “I didn’t prepare the PPP application myself. My accountant (or bookkeeper, or loan advisor, or business consultant) filled out the forms and told me to sign. I trusted them. I didn’t know the information was false.” It sounds reasonable. But Florida federal courts apply the “willful blindness” doctrine, and reliance on an accountant doesn’t defeat that.

Under United States v. Jewell, 532 F.2d 697 (9th Cir. 1976), a defendant who deliberately avoids learning the truth can be found guilty of knowingly committing fraud. In the PPP context, courts reason that even if you didn’t personally prepare the application, you signed it. By signing, you certified that the information was true and correct. You had a duty to verify the information before signing—you can’t just rely blindly on someone else’s numbers.

The Southern District of Florida has rejected the “reliance on accountant” defense in at least 15 PPP fraud cases since 2021. Judges instruct juries that willful blindness satisfies the intent requirement. Juries regularly convict defendants who claim they didn’t know, finding that they should have known or deliberately avoided knowing.

Look, I’m not saying reliance on professionals is irrelevant—it can be part of a broader defense strategy if you can prove that your accountant affirmatively misrepresented the numbers to you and you had no reason to doubt them. But that requires evidence: emails showing you asked questions and were given false answers, testimony from the accountant admitting they made mistakes, documentation showing you provided accurate information to the accountant and they incorrectly reported it. Most defendants don’t have that kind of evidence.

“I Didn’t Read What I Signed”

This variation is even worse. Defendants sometimes say, “I just signed what my accountant put in front of me. I didn’t read it carefully.” That’s not a defense—it’s an admission of recklessness. Federal criminal law doesn’t require that you carefully review documents before signing them, but it does impose liability when you sign false statements. Saying “I didn’t read it” doesn’t negate the fact that you signed a false application under penalty of perjury.

Prosecutors love this defense because it makes thier case easier. They argue: “The defendant admits he signed the application. He admits he didn’t verify the information. He admits he didn’t care whether it was accurate. That’s the definition of willful blindness.” Juries agree.

“The SBA Approved the Loan”

Some defendants argue that the SBA’s approval of the loan means the government verified the information and found it acceptable. This is wrong on multiple levels. The SBA’s approval process during the PPP program was largely automated. Lenders submitted applications electronically, the SBA’s system checked for basic eligibility (business registered, EIN valid, not on exclusion lists), and approved loans within hours or days. The SBA did not verify the accuracy of payroll numbers, review tax returns, or confirm that businesses were operational. Approval was based on the representations you made on the application.

When prosecutors discover that those representations were false, the fact that the loan was initially approved is irrelevant. The fraud is in making the false statements, not in whether the SBA detected them. You can’t commit fraud and then claim it’s not fraud because the victim didn’t realize they were being defrauded.

“I Was Going to Use It Correctly”

Intent at the time of application is what matters. Some defendants argue: “I intended to use the funds for payroll and business expenses. Things changed and I ended up using the money differently, but I didn’t commit fraud because my intent was good at the beginning.” Courts reject this defense because the fraud occurs when you submit the application with false information, not when you misuse the funds later.

If your 2019 tax returns showed you had no employees and net profit of $30,000, but you applied for a $200,000 PPP loan claiming you had $90,000 in monthly payroll expenses, you committed fraud at the time you submitted the application. It doesn’t matter what you intended to do with the funds if you got them—the false statements on the application are the crime.

Now, misuse of funds is additional evidence of intent. If you claimed you needed the loan for payroll and then immediately spent it on a Mercedes, prosecutors will argue that proves you never intended to use it for payroll—you intended to defraud the program from the start. But even without misuse, false statements on the application are enough for a conviction.

“Everybody Was Doing It”

No. Just no. The fact that PPP fraud was widespread doesn’t make it legal. Prosecutors have heard this argument in literally hundreds of cases. It’s not a defense. If anything, it’s an aggravating factor—it shows you knew the program was being defrauded and you chose to participate anyway.

Judges are particularly unsympathetic to this defense because they’ve sentenced dozens of PPP fraud defendants and they know that “everybody” was not doing it. Millions of businesses applied for PPP loans honestly, used the funds correctly, and followed the rules. The fact that some people committed fraud doesn’t justify your decision to do the same.

Okay let me back up—I’m not saying these defenses are never raised or that they can’t be part of a broader strategy. But as standalone defenses, they fail consistently in Florida federal courts. If your attorney is building your defense around “I relied on my accountant” without more, you need to have a serious conversation about realistic outcomes.

Defenses That Actually Work

So what does work? Effective PPP fraud defense in Florida federal court requires challenging the government’s evidence, presenting alternative explanations for discrepencies, and demonstrating good faith. Here are the strategies that have succeeded in reducing charges, securing favorable plea deals, or winning acquittals.

Challenge the Payroll Calculations

Sometimes the discrepancy between your tax returns and your PPP application isn’t fraud—it’s a legitimate dispute about how payroll should be calculated. For example, sole proprietors were allowed to use net profit from the 2019 Schedule C, up to $100,000, to calculate their loan amount. But the instructions were confusing, and many applicants mistakenly included expenses that shouldn’t have been included or used gross receipts instead of net profit.

If you can show that you made a good faith effort to calculate payroll correctly, used a reasonable interpretation of the rules (even if it wasn’t the correct interpretation), and relied on guidance from the SBA or your lender, that undermines the intent element. Prosecutors have to prove you knowingly submitted false information. If you genuinely believed your calculations were correct based on the information available to you, that’s a defense.

This works best when you have documentation: emails to your lender asking how to calculate payroll, notes showing you researched the requirements, drafts of your application showing you tried to get the numbers right. It also helps if the amounts are close—if your Schedule C showed $95,000 and you claimed $100,000, that’s more defensible then if your Schedule C showed $30,000 and you claimed $200,000.

Prove Good Faith Mistake

Fraud requires intent. If you can prove that any false statements on your application were the result of mistakes—negligence, confusion, poor record-keeping—rather then intentional deception, you may avoid criminal liability. The challenge is that prosecutors will argue mistakes of this magnitude aren’t innocent, especially when the result is a six-figure loan.

Good faith mistake defenses work best when you can show: you provided your accountant with accurate information but they made errors in preparing the application, you misunderstood complex requirements and made reasonable but incorrect assumptions, you corrected errors as soon as you discovered them (for example, if you realized after receiving the loan that the payroll numbers were wrong and you contacted the lender or SBA to report the error).

This defense requires contemporaneous evidence. If you claim you discovered the error in 2021 and tried to correct it, but there’s no evidence of you contacting anyone or taking corrective action until after the FBI investigation started in 2024, prosecutors will argue you’re fabricating the “good faith mistake” story to avoid liability.

Attack the Forensic Accountant’s Methodology

The government’s case often depends on the forensic accountant’s report. If you can challenge the methodology—showing that the accountant made errors, used incorrect assumptions, or failed to consider exculpatory evidence—you weaken the prosecution’s case. This requires hiring your own forensic accountant to review the government’s report and identify flaws.

For example, government accountants sometimes compare your PPP payroll numbers to your Schedule C net profit without accounting for payroll expenses that are deducted elsewhere on the Schedule C. Or they assume cash withdrawals were personal use without considering that cash-based businesses (restaurants, retail) use cash for legitimate business expenses. Or they calculate loan forgiveness amounts differently then the SBA’s forgiveness platform calculates them, overstating the amount of misused funds.

Attacking the forensic report is technical and expensive—you need expert witnesses and detailed financial analysis—but it can be effective, especially in cases where the loss amount is borderline and reducing it by $50,000 or $100,000 changes the sentencing guideline range significantly.

Demonstrate Legitimate Business Operations

If the core of the government’s case is that your business was fake or non-operational, proving that the business was real and operational before February 15, 2020 defeats a key element. You need documentation: business formation documents, business licenses, tax returns for prior years, contracts with clients or vendors, bank statements showing business activity, lease agreements for business premises, advertising or marketing materials, business insurance policies.

This defense is most effective when combined with an explanation for the discrepencies. For example: “Yes, my business was operational and legitimate. The discrepancy between my tax returns and my PPP application occurred because I misunderstood how to calculate payroll for owner compensation. Here’s evidence that the business was real, and here’s why I made the mistake I made on the application.”

Challenge Venue and Jurisdiction

In some cases, especially for defendants who live outside Florida but ended up charged in Florida federal court, venue challenges can be effective. Under 18 USC § 3237, venue in fraud cases is proper in any district where the fraud occurred. For PPP fraud, that includes where the application was submitted, where the lender is located, where the borrower is located, and where the funds were received or used.

The Southern District of Florida has jurisdiction over alot of cases where the only Florida connection is that the bank that processed the loan is based in Miami or the defendant submitted the application while temporarily in Florida. If you can show that your contacts with Florida were minimal and the case would more properly be prosecuted in your home state, you may be able to transfer the case. This doesn’t eliminate the charges, but it can change the dynamics—Miami juries and AUSAs are different then, say, Kansas juries and AUSAs.

Venue challenges rarely succeed, but they’re worth exploring if the Florida connection is weak. And they can be leverage in plea negotiations—AUSAs may be willing to make concessions to avoid the burden of prosecuting a defendant who lives across the country and would require extensive travel and coordination.

Negotiate Pre-Charge Resolution

The best defense is preventing charges from being filed in the first place. If your case is still in the audit phase or early investigation phase, experienced defense counsel can contact the AUSA, present exculpatory evidence, and negotiate a resolution that avoids indictment. This might involve repaying the loan, paying a civil penalty, and entering into a non-prosecution agreement.

Pre-charge resolution is most viable when: the loss amount is relatively low (under $150,000), you have a legitimate business, the discrepencies can be explained as mistakes rather then intentional fraud, you’re willing to repay the full amount plus penalties, you have mitigating factors (no criminal history, financial hardship, reliance on professional advice).

The key is timing. Once the FBI has invested substantial resources into investigating your case and the AUSA has presented it to the grand jury, the likelihood of pre-charge resolution drops significantly. But during the audit phase—before the OIG makes a criminal referral—intervention can prevent the case from ever becoming criminal.

Acceptance of Responsibility and Restitution

If the evidence is strong and conviction is likely, the most effective strategy is often acceptance of responsibility. Under USSG § 3E1.1, defendants who clearly demonstrate acceptance of responsibility receive a 2-level reduction in thier offense level (which translates to a significantly shorter sentence). If you plead guilty before trial, you may receive an additional 1-level reduction for timely acceptance.

Acceptance of responsibility means more then just pleading guilty—it means admitting what you did, expressing genuine remorse, not minimizing your conduct, and making restitution. Defendants who plead guilty but then argue “I didn’t really do anything wrong, the government is overreaching, I’m only pleading because I can’t afford to go to trial” don’t get acceptance of responsibility credit. Judges see through that.

Restitution—repaying the loan amount (or the amount that was misused)—is a powerful mitigating factor at sentencing. Judges view defendants who have made full or substantial restitution more favorably then defendants who haven’t repaid anything. If you can’t afford full restitution, even partial repayment demonstrates good faith. And it reduces the loss amount for guideline calculation purposes, which can lower your sentencing range.

To Cooperate or Go to Trial?

This is the biggest strategic decision you’ll face if your charged with PPP fraud. Cooperation means providing information to prosecutors about other people involved in fraud, testifying against co-defendants, or helping the government investigate related cases. Going to trial means asserting your innocence and making the government prove it’s case beyond a reasonable doubt.

What Cooperation Actually Means

Federal prosecutors offer “proffer agreements” (sometimes called “Queen for a Day” letters) to defendants who may have valuable information. A proffer agreement allows you to meet with prosecutors and agents, provide information about your case and others, and do so without your statements being used directly against you in the government’s case-in-chief. However, statements made during proffer can be used to impeach you if you testify at trial and say something inconsistent, and they can be used for other purposes like sentencing.

In multi-defendant PPP fraud cases, prosecutors use proffers to gather evidence. They interview one defendant, learn about co-defendants’ roles, and then use that information to build cases against the others. If you proffer and implicate others, you’re creating cooperation obligations—you may be required to testify against them, which can create personal and professional consequences.

Cooperation can result in substantial assistance under USSG § 5K1.1. If prosecutors file a § 5K1.1 motion stating that you provided substantial assistance to the investigation or prosecution of others, the judge can depart below the guideline range—sometimes significantly. Defendants who provide substantial assistance in major PPP fraud conspiracies have received sentences 30-50% below what they would have received otherwise. In some cases, defendants facing 5+ years received probation based on cooperation.

But cooperation isn’t guaranteed to result in substantial assistance credit. Prosecutors have discretion whether to file the § 5K1.1 motion. If your information isn’t valuable (prosecutors already knew it, or it doesn’t lead to additional prosecutions), you won’t get credit. And you’ve given up information that could be used against you or damaged relationships with co-defendants.

When Cooperation Makes Sense

Cooperation is worth considering if: you were involved in a larger conspiracy and have information about the organizers or others with greater culpability, the evidence against you is overwhelming and conviction is nearly certain, your facing a high guideline range (10+ years) and cooperation is the only way to reduce it substantially, you don’t have viable defenses and acceptance of responsibility alone won’t be enough.

Cooperation is most effective when your early—if you proffer before others do, your information is more valuable. If you’re the tenth defendant to proffer and prosecutors already have the full story, your information is less valuable and your less likely to get substantial assistance credit.

When Going to Trial Makes Sense

Going to trial makes sense if: the government’s evidence is weak or circumstantial, you have a viable defense (good faith mistake, challenge to forensic accounting, lack of intent), the government is overcharging you (charging you with conduct you didn’t commit or inflating the loss amount), the government’s plea offer is unreasonable (they’re refusing to drop charges that shouldn’t have been brought), your unwilling to accept a felony conviction and the collateral consequences that follow.

Federal trial conviction rates are high—around 83% of federal criminal trials result in convictions. But PPP fraud trials can be won, especially when the case involves complex financial evidence, disputes about loan calculations, or good faith mistake defenses. Juries sometimes acquit defendants when they believe the defendant made mistakes rather then committed intentional fraud.

The downside of going to trial is that if you lose, you don’t get acceptance of responsibility credit. That means a 2-3 level higher sentencing guideline range. And judges sometimes impose harsher sentences after trial then they would have after a guilty plea, viewing the trial as wasting judicial resources when the evidence was strong.

The Proffer Trap

One thing to be very careful about: proffering without a clear strategy. Some defendants proffer thinking it will help them, only to realize they’ve given prosecutors evidence that strengthens the case against them. Proffer agreements say your statements can’t be used directly in the government’s case-in-chief, but they can be used to develop leads, corroborate other evidence, and impeach you if you testify.

In practice, this means prosecutors can use your proffer statements to interview witnesses you mentioned, subpoena documents you identified, and build a stronger case. They can’t put the agent on the stand to say “The defendant told us he submitted a false application,” but they can use your proffer to find the evidence that proves you submitted a false application. And if you later testify at trial and say something different then what you said in the proffer, prosecutors will use the proffer to impeach you, showing the jury you changed your story.

Don’t proffer unless your prepared to cooperate fully. Half-measures—where you proffer to “show good faith” but don’t provide substantial assistance—often backfire.

What Sentence Are You Actually Facing?

Federal sentencing for PPP fraud is governed by the U.S. Sentencing Guidelines, specifically USSG § 2B1.1 (Theft, Property Destruction, and Fraud). The guidelines calculate a base offense level based on the loss amount, then adjust for various factors. Here’s how it works in practise.

Base Offense Level by Loss Amount

The guidelines assign offense levels based on the total loss amount:

• $95,000 to $150,000: Base offense level 14
• $150,000 to $250,000: Base offense level 16
• $250,000 to $550,000: Base offense level 18
• $550,000 to $1.5 million: Base offense level 20
• $1.5 million to $3.5 million: Base offense level 22
• $3.5 million to $9.5 million: Base offense level 24

Each 2-level increase corresponds to a significant increase in the sentencing range. For example, at offense level 14 with no criminal history (Criminal History Category I), the guideline range is 15-21 months. At offense level 20, the range is 33-41 months. At offense level 24, the range is 51-63 months.

Enhancements and Reductions

From the base offense level, the court applies enhancements and reductions based on your conduct:

Sophisticated means (+2 levels): If the fraud involved sophisticated means—complex financial transactions, use of shell companies, multiple fraudulent applications—the offense level increases by 2. Many PPP fraud cases involve this enhancement because submitting false applications with fabricated payroll documents is considered “sophisticated.”

Role in the offense: If you were an organizer or leader of a fraud scheme involving 5+ participants, add 4 levels. If you were a manager or supervisor of a scheme involving 5+ participants, add 3 levels. If you were a minimal or minor participant, subtract 2-4 levels. Most PPP fraud defendants don’t get role enhancements because they acted alone or with 1-2 others.

Acceptance of responsibility (-2 or -3 levels): If you clearly accept responsibility for your offense—by pleading guilty, expressing genuine remorse, and not minimizing your conduct—you receive a 2-level reduction. If your offense level is 16 or higher and you plead guilty early enough that the government doesn’t have to prepare for trial, you receive an additional 1-level reduction. This is huge—3 levels can reduce your sentence by 30-40%.

Real Sentences in Florida PPP Fraud Cases

Average sentence for convicted PPP fraud defendants in Florida is 38 months, but there’s wide variation based on loss amount and aggravating factors:

David T. Hines (Miami, 2020): $3.9 million fraud, purchased Lamborghini and luxury goods, sentenced to 78 months (6.5 years)

Maurice Fayne (Miami, 2021): $2 million PPP fraud as part of broader fraud scheme, sentenced to 17.5 years (but this included other fraud charges and he had a substantial criminal history)

Casey David Crowther (Tampa, 2021): $1.9 million fraud, used funds for personal expenses, sentenced to 10 years (120 months)

Adriana Cambrice (Orlando, 2022): $1.2 million fraud, fake employees on applications, sentenced to 5 years (60 months)

For smaller cases (under $250,000) with acceptance of responsibility and no criminal history, sentences typically range from probation to 24 months. For mid-range cases ($250,000 to $1 million), sentences typically range from 24 to 60 months. For high-dollar cases (over $1 million) with aggravating factors, sentences can exceed 10 years.

Federal Prison Time Is Real Time

Federal defendants serve 85% of thier imposed sentence. There’s no parole in the federal system. If you’re sentenced to 36 months, you’ll serve approximately 30.6 months (with good time credit of 15% for good behavior). If your sentenced to 60 months, you’ll serve approximately 51 months. Factor this in when evaluating plea offers—a 36-month sentence means you’ll actually serve about 2.5 years.

Beyond prison time, convicted defendants face: supervised release (typically 3 years of probation after release from prison), restitution (repayment of the full loss amount), forfeiture of assets acquired with fraud proceeds, fines (up to $250,000 for wire fraud, up to $1 million for bank fraud), special assessment ($100 per count).

How Miami, Tampa, and Jacksonville Are Different

Florida’s three federal districts handle PPP fraud cases differently, and understanding these differences matters for strategy.

Southern District of Florida (Miami)

The Southern District, headquartered in Miami, has prosecuted more PPP fraud cases then any federal district in the country—over 450 cases since 2020. The district covers Miami, Fort Lauderdale, West Palm Beach, and the Keys. It’s known for aggressive prosecution of financial crimes, and the U.S. Attorney’s Office has significant resources dedicated to fraud cases.

Miami’s international business ties mean many defendants are non-U.S. residents or have international connections. The district has prosecuted defendants living in Latin America, the Caribbean, and Europe who obtained PPP loans using U.S. business entities or by falsely claiming to operate businesses in the U.S. Venue in the Southern District is often based on the bank being located in Miami, even if the defendant has minimal Florida contacts.

Jury pools in Miami are diverse and include many small business owners who applied for PPP loans legitimately. These juries can be sympathetic to defendants who made mistakes but can also be harsh on defendants who committed obvious fraud (fake businesses, luxury purchases). The AUSAs in the Southern District are experienced with complex financial cases and are less likely to offer favorable plea deals in high-dollar cases.

Middle District of Florida (Tampa/Orlando)

The Middle District, with divisions in Tampa, Orlando, Jacksonville, Fort Myers, and Ocala, has prosecuted over 380 PPP fraud cases. The district is known for prosecuting “grey area” cases—legitimate businesses that inflated payroll numbers or misused funds—rather then just obvious fraud.

AUSAs in the Middle District have been willing to negotiate pre-charge resolutions in some cases, especially when the defendant has a legitimate business, the loss amount is under $200,000, and the defendant is willing to make full restitution. Tampa and Orlando juries tend to be more conservative then Miami juries and may be more sympathetic to business owners who made mistakes during the chaos of COVID-19.

The Middle District also handles alot of cases involving loan brokers and advisors who helped multiple clients apply for PPP loans. These conspiracy cases are more complex and involve issues of knowledge and intent that can be favorable for defendants who relied on professionals.

Northern District of Florida (Tallahassee)

The Northern District, headquartered in Tallahassee with divisions in Pensacola, Panama City, and Gainesville, has prosecuted fewer PPP fraud cases (around 120) but still actively enforces the program. The district is more rural, and cases tend to involve smaller loan amounts then in Miami or Tampa.

Jury pools in the Northern District are generally more conservative and may be sympathetic to small business owners. However, they can also be harsh on defendants who defrauded government programs, especially if the defendant has no ties to the community. The U.S. Attorney’s Office in the Northern District has fewer resources then the Southern or Middle Districts, which can sometimes mean less aggressive prosecution or more willingness to negotiate plea deals in borderline cases.

Venue can matter significantly for trial strategy. A defendant charged in rural Pensacola faces a very different jury then a defendant charged in Miami. Defense attorneys sometimes negotiate for venue transfers or argue that the case should be prosecuted in a different district based on where the defendant resides or where the conduct primarily occurred.

Should You Repay the Loan?

One of the most common questions defendants ask is whether repaying the PPP loan will resolve the criminal case. The short answer is no—but strategic repayment can significantly improve your situation.

Voluntary Repayment Doesn’t Stop Prosecution

Department of Justice policy, articulated in Deputy Attorney General Lisa Monaco’s March 2022 memo, makes clear that voluntary repayment of fraudulently obtained funds is a sentencing factor, not a bar to prosecution. Prosecutors view repayment favorably because it demonstrates acceptance of responsibility and reduces the loss to the government. But it doesn’t prevent them from filing charges if they believe the evidence supports prosecution.

The reason is straightforward: allowing defendants to avoid prosecution by repaying fraudulently obtained funds would create a perverse incentive. Defendants could commit fraud, use the money, and then repay it if caught—with no criminal consequences. The criminal justice system doesn’t work that way. The crime is in obtaining the funds through fraud, not in keeping them.

That said, defendants who have voluntarily repaid loans before charges were filed, especially if they repaid early (within months of receiving the loan) and did so proactively (without being asked), have received favorable treatment. Some avoided prosecution entirely through pre-charge resolution. Others received significantly reduced sentences because judges viewed early repayment as strong evidence of good faith and remorse.

Strategic Repayment as Part of Negotiated Resolution

The right approach is strategic repayment—repayment coordinated with your attorney and, ideally, negotiated with the AUSA as part of a broader resolution. Here’s how this works:

During the audit phase or early investigation phase, your attorney contacts the AUSA handling the case (or the SBA OIG if it hasn’t been referred yet). Your attorney presents your side of the story, provides exculpatory evidence, and proposes a resolution: you’ll repay the full loan amount, pay a civil penalty, and agree to certain conditions (like cooperating with the investigation or agreeing not to apply for federal loans in the future). In exchange, the government agrees not to file criminal charges.

This type of pre-charge resolution is most viable when: the case is still in the audit phase (before criminal referral), the loss amount is under $150,000, you have a legitimate business and the discrepencies can be explained as mistakes, your willing to make full restitution plus penalties, you have strong mitigation (no criminal history, financial hardship, family circumstances).

The advantage of strategic repayment is that it’s coordinated with the AUSA’s office, so you get something in return—a non-prosecution agreement or a declination letter. Unilateral repayment (just sending the SBA a check without coordination with prosecutors) doesn’t get you that protection.

When NOT to Repay

Don’t repay the loan without consulting a federal criminal defense attorney first. Here’s why: if you repay the loan, you’re effectively admitting that you weren’t entitled to it. That admission can be used against you if prosecutors decide to file charges anyway. You’ve given up tens or hundreds of thousands of dollars and you still face criminal liability.

Also, if your facing financial hardship and can’t afford full repayment, partial repayment may not help your situation. Prosecutors and judges want to see meaningful restitution. Repaying $10,000 on a $200,000 loan doesn’t demonstrate acceptance of responsibility—it might even suggest you’re trying to minimize your conduct without actually making things right.

And finally, if your planning to assert defenses (the loan was legitimate, the calculations were correct, you didn’t commit fraud), repaying the loan undercuts those defenses. It’s hard to argue “I didn’t do anything wrong” while simultaneously repaying the money. The two positions are inconsistent.

The right time to repay is after you’ve consulted with your attorney, assessed your exposure, and determined that repayment as part of a negotiated resolution or as a sentencing mitigation strategy is in your best interest. That might mean repaying during the audit phase to avoid criminal referral, or it might mean repaying after charges are filed as part of a plea agreement, or it might mean repaying before sentencing to demonstrate acceptance of responsibility.

What to Do Right Now

If your reading this, your probably in one of the following situations. Here’s what to do based on where you are in the process.

You received an SBA audit letter or request for documentation: You have 30-45 days to respond before the forensic accountant finalizes thier report. This is your best opportunity to prevent criminal charges. Contact a federal criminal defense attorney immediately—not a civil attorney, not a CPA, not a business lawyer. You need someone who understands federal criminal investigations and can work with forensic accountants to present your case favorably. Do not respond to the SBA without legal counsel reviewing your submissions.

You received a grand jury subpoena: A grand jury subpoena means the case is in the criminal phase. The FBI has investigated, and prosecutors are presenting evidence to the grand jury to seek an indictment. Contact an attorney immediately. Do not produce documents or testify without counsel. Responding to a grand jury subpoena incorrectly—producing incomplete documents, testifying without understanding your Fifth Amendment rights—can result in additional charges (obstruction, perjury).

FBI or SBA OIG agents contacted you: Do not speak to them without an attorney present. Politely decline to answer questions and provide your attorney’s contact information. Agents may say they just want to “hear your side of the story” or they’re “giving you a chance to clear this up before charges are filed.” This is an interrogation tactic. Anything you say will be used to build the case against you. Invoke your Fifth Amendment right to remain silent and your Sixth Amendment right to counsel.

You haven’t heard anything yet, but you’re worried: If you applied for a PPP loan and you’re concerned about discrepencies in your application or how you used the funds, consult with an attorney to assess your risk. In some cases, proactive steps (voluntary disclosure, repayment, correcting false information) can prevent charges. In other cases, doing nothing is the right strategy because you haven’t done anything wrong and there’s no indication you’re under investigation. An experienced attorney can advise you on whether proactive steps are advisable or whether they would create more risk.

PPP fraud investigations and prosecutions are going to continue for several more years. The statute of limitations doesn’t expire until 2030-2033 for loans obtained in 2020-2023. And Florida remains the most aggressive state for enforcement