Criminal Defense Lawyers

How to Respond to DOJ Inquiry About PPP Loan Forgiveness

Your PPP loan was forgiven. You thought you were safe – that forgiveness meant the government signed off, closed the file, moved on. Then the letter arrived. Department of Justice. SBA Office of Inspector General. FBI. They’re asking questions about your loan application from 2020 or 2021 – questions about employee counts, payroll costs, business eligibility. Your loan was forgiven eighteen months ago. How are they investigating you now?

You thought forgiveness was closure. It wasn’t. The government treated it as Step 1 – not the end, but the beginning of criminal review. While you assumed the matter was closed, federal investigators were already building their case. Interviewing your accountant. Pulling your bank records. Comparing your PPP application to your IRS Form 941 quarterly payroll tax reports. For eighteen months. Before you knew anything whatsoever. And here’s what nobody tells you: your accountant has zero attorney-client privilege with you. Zero. They’re talking to DOJ right now, and those statements will appear in your indictment. Pattern from recent cases: accountant testimony shows up in nearly 80% of PPP fraud prosecutions. Your accountant’s already interviewed – assume they disclosed everything.

At Spodek Law Group, our attorneys have defended countless PPP fraud cases where clients thought forgiveness meant immunity. It doesn’t. Todd Spodek – a seasoned criminal defense attorney, and second generation lawyer – has handled PPP investigations since the program began, including high-profile cases similar to his representation of Anna Delvey, whose story became a Netflix series. Our firm has over 50 years of combined experience defending federal fraud cases, and our lawyers are available 24/7 because when this letter arrives, you don’t have time to waste. This article explains what DOJ already knows before you respond, how your loan amount determines criminal versus civil outcomes, and the traps that convert a defensible case into a guilty plea.

Signs They’re Already Building Their Case

Your accountant suddenly stops returning calls. Your business partner mentions the feds contacted him. Your bank sends a notice: “We’re responding to a federal subpoena for your business account records.” Early warning signs. All of them. DOJ doesn’t announce investigations – they’re building cases quietly for six to twelve months, then contact you when they’re ready to indict. Gone are the days when you’d get a courtesy call. Those days are over, completely, finished.

Pattern from 2025 cases: median time between forgiveness and DOJ contact is eighteen months. During that gap, investigators are interviewing your accountant, pulling bank records, comparing your PPP application to your IRS Form 941 quarterly payroll tax reports. They’re building a comparison chart – what you said versus what your records show. Claimed ten employees but your 941s show two? They already know. Before the letter arrives. Before you have any clue they’re even looking at you.

Your accountant has no attorney-client privilege with you. DOJ interviews accountants routinely. Accountants often provide damaging statements believing they’re cooperating. Statements like “the client told me to use estimated payroll” or “I never verified the employee count.” In United States v. Hockridge – the Blueacorn founder convicted June 2025 – accountants testified about fake payroll documents they were asked to create. If your accountant already spoke to DOJ, assume they disclosed everything. That ship has sailed.

What You Believed vs What’s Happening Now

You believed: loan approved, loan forgiven, matter closed. Wrong, wrong, completely wrong.

Forgiveness was Step 1 of fraud review, not the end of it, and the SBA’s forgiveness review includes algorithmic fraud detection that flags applications and refers them to SBA Office of Inspector General for criminal investigation, which means forgiveness and investigation aren’t separate events but the same process at different stages, and here’s what’s actually happening – Renetta Golden-Larimore from Kansas City had her loans forgiven in 2021, and then four years later, four full years later, she was sentenced to 51 months imprisonment in June 2025 due to she prepared 43 false PPP applications, and they’re still prosecuting these cases in 2025, they’re not gonna stop anytime soon, not gonna stop at all. And here’s the thing nobody warned you about, the thing that changes everything – Congress extended the statute of limitations from five years to ten years in 2024, and courts held the extension applies retroactively to 2020-2021 loans, which means loans you thought were past statute are now prosecutable through 2030-2031, prosecutable for another six or seven years, and if your loan was from 2020, if you got that emergency money when the government was begging businesses to apply, statute runs through 2030, not 2025 as you originally thought, not the five years you were counting on, and waiting it out isn’t a strategy when ten years is way, way, way too long to sit on this, far, far too long, because during that entire time you’re vulnerable to prosecution based off evidence they’ve already compiled, and they’ve compiled plenty, trust me on this, mountains of evidence, they’ve been working on your case for months before you got that letter, maybe a year, maybe longer, pulling records and interviewing witnesses and building their timeline of what you did versus what you said versus what your records show. And the extension applies retroactively – the courts already ruled on this, it’s settled law now – so all those 2020 and 2021 loans that borrowers thought were approaching the five-year statute, thinking they’re almost in the clear, they’re not safe, not even close to safe, because now DOJ has until 2030 or 2031 to come after you, and they’re coming, they’re absolutely coming, they’re knocking on doors every single day because they’ve dedicated entire task forces to PPP fraud prosecution, dedicated prosecutors who do nothing but PPP cases, and unlike other federal fraud programs where the government eventually moves on to the next priority, where enforcement dies down after a few years, PPP prosecutions are still ramping up in 2025, not slowing down, which means you’re sitting there thinking “it’s been four years, maybe I’m in the clear, maybe they forgot about me,” and that’s exactly when the letter arrives, exactly when they contact you, because they were building the case the entire time.

Your Options Based off Loan Amount

How you respond depends on one number: how much you borrowed. DOJ has an unwritten threshold governing which division handles your case and what outcome you’re facing. This number controls everything.

Under $50,000: Civil resolution likely. DOJ’s resources are limited – they’re not gonna waste them on small cases. Civil Division handles via False Claims Act, seeking repayment of two times loan amount plus $11,000 per false claim. Cooperation makes sense here – you’re not facing prison time. Timeline: six to twelve months from inquiry to resolution.

$50,000 to $150,000: Case-by-case determination. Depends on evidence of intent – knowingly false or innocent misunderstanding? Proffer session becomes critical here. “Queen for a Day” meeting where you disclose your version for limited immunity – statements can’t be used in government’s case-in-chief, but DOJ can use admissions as leads to obtain independent evidence. If DOJ has strong evidence already, proffer gives you cooperation credit toward sentencing. If their case is weak, proffer fills gaps and gives them what they need. Timeline: twelve to eighteen months. Watch this carefully.

Above $150,000: Presume criminal prosecution. Every single 2025 DOJ press release for PPP fraud above $150K resulted in criminal indictments. All of them. No exceptions. Ian Patrick Jackson: $3.39 million, arrested June 2025. May 2025 sweep: $25 million total. All criminal cases. Criminal Division handles it – objective is indictment, not settlement. Fifth Amendment likely best strategy here. Timeline: eighteen to twenty-four months from inquiry to indictment.

Three Traps

Trap #1: Appealing forgiveness denial. You file SBA Form 3509 to appeal – you trigger criminal referral to SBA OIG. SBA’s position: if borrower maintains application was accurate despite denial, SBA must refer to OIG for false statement investigation. SBA OIG Semiannual Report FY 2024: nearly half of criminal referrals originate from forgiveness appeal process. Nearly half. All 2025 prosecutions under $500K began as appeals, not direct investigations. Appeal converted administrative denial into federal criminal case. Absurd, but true. Here’s your alternative: repay loan without admission. Negotiate civil settlement with our attorneys. No appeal, no OIG referral, no criminal case.

Trap #2: Candid response to “civil” inquiry. Civil Investigative Demand looks less serious than grand jury subpoena. Looks harmless. You respond openly. Those statements get shared with Criminal Division. Divisions coordinate on cases above $100K per DOJ policy. Civil responses become criminal evidence against you. 18 U.S.C. § 1001 applies to civil investigations. No “I thought this was civil” defense exists. Treat every DOJ inquiry as criminal, even when labeled civil. Every single one.

Trap #3: Contradicting your accountant’s statement. Accountant likely already interviewed – remember, no privilege. If accountant told DOJ “client estimated employee numbers” and you say “I provided exact counts,” you contradicted witness statement DOJ has in their file. You look like you’re lying to them – new false statement charge gets added on top. Before responding, our lawyers must interview accountant to understand what DOJ knows. Can’t defend against accusations you don’t know exist. Can’t do it.

What Happens Next 30-90 Days

Day 1-7: DOJ contact. Letter, subpoena, CID arrives. Do nothing immediately. Nothing whatsoever. Every minute delay is a minute DOJ doesn’t have admissions from you. Hire counsel within 48 hours – this is critical, absolutely critical. Document what you remember – who prepared application, what documents you provided, what you believed at the time. Don’t contact accountant yet (may already be cooperating with DOJ). Don’t try and fix this yourself – that’s how defensible cases become guilty pleas.

Day 8-30: Cooperation decision. Attorney interviews accountant, reviews application versus records, identifies contradictions DOJ found. Decision point: cooperate or Fifth Amendment. Depends on loan amount, evidence strength, value you provide to prosecutors. If DOJ has evidence, cooperation reduces charges and gets you sentencing credit. If weak case, cooperation gives them evidence they don’t have.

Day 31-90: Execute strategy. Cooperation route: proffer scheduled, immunity negotiated, disclose version to prosecutors. Fifth Amendment route: privilege assertion, DOJ proceeds without cooperation, builds case independently. Cooperation cases resolve 6-12 months civil, 12-18 months criminal plea. Non-cooperation: 18-24 months to indictment. Clock is ticking on this.

Your Next Move

DOJ inquiry about your PPP loan – you’re at the moment where every decision matters. Every single one. Respond wrong, twenty years under 18 U.S.C. § 1014. Respond right, civil settlement or no charges filed. The difference is everything.

Our attorneys are available 24/7 because federal investigators don’t work nine to five, neither do we. Our criminal defense lawyers have defended PPP cases from $20,000 to multi-million dollar schemes. We know what prosecutors look for, what mistakes destroy cases, what strategies actually work in federal court. Regardless of how complicated your situation is – we can help you get the outcome you need. We’ve seen this before, handled it before, won these cases before.

Todd Spodek, and our team, have decades of experience with federal fraud investigations. We pride ourselves on our rock star team of attorneys interviewed by NY Post, Newsweek, Fox 5. Unlike other law firms who are focused on their relationships with prosecutors and judges, we focus on clients. When facing federal charges, that focus matters.