If My Tax Preparer Did My PPP Am I Liable

If My Tax Preparer Did My PPP Am I Liable

You had your tax preparer handle your PPP application. They calculated the payroll numbers. They filled out the forms. They submitted everything electronically. You figured that was their job – that’s why you paid them. If something was wrong with the application, that’s their problem. They’re the professional. They made the mistakes. Here’s what nobody explains: having a professional prepare your application doesn’t reduce your liability. It increases your evidence of conspiracy. You signed the application. You certified the information was true under penalty of perjury. You received the funds. When preparers get arrested for PPP fraud, their clients get arrested right alongside them. Not as witnesses. As co-defendants. Your signature isn’t a formality. It’s a legal instrument that makes you personally responsible regardless of who did the math.

Welcome to the Spodek Law Group resource on what happens when your tax preparer files a PPP application that turns out to be fraudulent – and why being their “client” offers zero protection. Our goal is to show you exactly how federal prosecutors view the preparer-client relationship, because the way they see it is completely different from the way you see it. You think: “I hired a professional. I trusted their expertise. I’m a victim of their fraud.” Prosecutors think: “This person paid someone to submit a false federal loan application on their behalf. The payment is evidence of conspiracy. The signature is evidence of personal certification. The receipt of funds is evidence of participation.”

That’s the reality Todd Spodek and the Spodek Law Group team explain to clients who come in after learning their preparer is under investigation. The initial reaction is always the same: “But I didn’t prepare the application – they did.” The problem is that prosecutors aren’t investigating whether your preparer committed fraud. They already know that. They’re investigating everyone who participated in the preparer’s network. Every client file is evidence. Every signature is a certification. Every payment is a conspiracy connection. You’re not watching from the sidelines. You’re in the target zone.

You Think Using a Preparer Protected You – It Created Conspiracy Evidence

Heres the paradox that changes everything about your situation. You used a tax preparer specifically because you wanted professional involvement. Someone who knew the rules. Someone who understood the paperwork. That professional involvement is now what connects you to a federal crime.

Think about how prosecutors view preparer-facilitated fraud. They dont see a service relationship where you hired someone for there expertise. They see a conspiracy where you paid someone to commit fraud on your behalf.

The payment creates the connection. You didnt just benefit from fraud – you funded it. You paid for someone to submit false statements to the federal government. That payment is exhibit A in the conspiracy case.

The signature creates the liability. Whatever numbers the preparer put on that application, you certified them as true. You signed under penalty of perjury. That signature is your personal guarantee that every statement on the application was accurate. It dosent matter who calculated the numbers. You certified them.

The receipt of funds creates participation. The money went into your account. You spent it. You benefited from whatever false statements appeared on the application. Thats not victimization. Thats participation in fraud.

21 Clients Charged Alongside Their Preparer

Lets look at the numbers that show exactly what happens when a PPP preparer gets prosecuted.

Renetta Golden-Larimore was a tax preparer in Kansas City. She prepared and filed approximatly 43 fraudulent PPP loan applications. Some got funded. Some got rejected. She charged between $2,000 and $7,000 per application.

Heres the number that matters: 21 other persons have been charged and convicted in connection with her fraud scheme.

Not just Golden-Larimore. Twenty-one clients. The people who paid her $2,000 to $7,000 for there “services.” They thought they were paying for expertise. They were actualy paying for a conspiracy. And when she got caught, they got caught too.

In Atlanta, Jerry Baptiste was the last of 20 defendants charged in a PPP fraud scheme. All twenty were convicted. Sentences ranged from probation to 15 years imprisonment. In another Atlanta case, Ian Patrick Jackson’s prosecution included 12 defendants – 9 of them were the business owners who used his services.

The pattern is clear. When preparers go down, clients go down with them. Not some clients. Not the biggest clients. Client after client after client.

Your Signature Isn’t a Formality – It’s Personal Certification

You probly thought signing the PPP application was just a formality. A checkbox. The preparer did all the work – you just signed where they told you to sign.

That signature is the most damaging piece of evidence against you.

PPP applications require a certification under penalty of perjury that the information is true and accurate. By signing, you personally certified that the payroll numbers were real. That the employee count was accurate. That the business qualified. That every statement on the application was truthful.

It dosent matter that the preparer calculated the numbers. It dosent matter that you never checked there math. It dosent matter that you trusted them. You signed. You certified. You are personally responsible for every false statement that appeared above your signature.

Federal prosecutors love signatures. They dont have to prove you calculated the false numbers. They dont have to prove you understood the fraud. They just have to point to your signature and say: “This person certified under penalty of perjury that the information was accurate. It wasnt. They either knew it was false or they were reckless about wheather it was true.”

Either way, your liable.

They Have Your Real Tax Returns

Heres the hidden connection that makes your situation worse then you realize. Your tax preparer has your REAL tax returns. They prepared them. They know exactly what your actual income was, what your actual payroll was, what your business actualy looked like.

If they filed a PPP application with dramaticaly different numbers, they knew it was false. They had your real records sitting right there. They saw the discrepancy. They filed the false application anyway.

Now think about how this looks to investigators. The same person who has your true financial records filed an application with false financial information. Thats not a mistake. Thats coordination.

Prosecutors will argue that you and your preparer coordinated to submit false information. They had your real tax returns showing $30,000 in income. The PPP application claimed $100,000 in payroll. Either you told them to inflate the numbers, or you watched them do it and didnt object.

The tax returns become the baseline. The PPP application becomes the lie. And your preparer – the person who had both documents in there hands – becomes the witness who can testify about what you knew and when you knew it.

The Fee You Paid Is Evidence

How did you pay your preparer for handling your PPP application? This matters more then you think.

If you paid a flat fee – $500 or $1,000 – prosecutors can argue it was a service fee. Still problematic, but its a standard arrangement.

But many PPP preparers charged percentage fees. 10% of the loan. 15% of the proceeds. Some charged $5,000 to get a $20,000 loan. Pay five thousand, get twenty thousand. Sounds like a good deal.

That payment structure is evidence of fraud.

Why would you pay 10% of your loan amount to someone just filling out paperwork? The only reason is if you knew the paperwork was fraudulent and you were sharing the proceeds. A percentage fee isnt a service charge. Its profit sharing. Its a kickback.

In the Roanoke Virginia case, a 142-count indictment charged 24 defendants. The scheme was simple: pay $5,000, get a $20,000 PPP loan. Every client who paid that fee is now facing federal charges. The payment became evidence of there knowing participation.

If you paid your preparer based on how much money you recieved – if your fee increased because your loan was bigger – prosecutors will argue you were splitting the proceeds of fraud.

Your Preparer Is Cooperating Against You Right Now

When your preparer gets arrested, the first thing there lawyer tells them is: cooperate.

Federal sentencing guidelines give substantial credit for cooperation. The more names a defendant provides, the more information they share, the more useful they are to prosecutors – the lighter there sentence. Your preparer is facing years in federal prison. The only way to reduce that sentence is to help prosecutors build cases against other people.

Those other people are you.

Right now, your preparer is sitting with there attorney and a federal prosecutor. Theyre going through client files. Theyre explaining which applications were fraudulent and why. Theyre identifying who provided false information and who knew the truth.

Every client they name earns cooperation credit. Every detail they provide about how applications were prepared reduces there sentence. Theyre not protecting you. Theyre trading information about you for there own freedom.

You might think: “We had a good relationship. They wouldnt turn on me.” When your facing 5 to 10 years in federal prison, relationships dont matter. Survival matters. Your preparer is surviving by giving you up.

Their Best Defense Requires Your Conviction

Heres the irony that should terrify you. If your preparer goes to trial instead of pleading guilty, what defense do you think there going to use?

“I just filed what my clients told me.”

Thats it. Thats the defense. The preparer argues they were just a facilitator – they took information from clients and put it on forms. If the information was false, thats the clients fault. The preparer was just following instructions.

For this defense to work, the preparer has to prove that YOU provided false information. They have to show that you gave them inflated payroll numbers. They have to demonstrate that you told them to claim employees that didnt exist. They have to establish that the fraud came from you, not them.

In other words, there acquittal requires your conviction.

Your preparer is not your ally in this. There not going to protect you. There not going to take the fall for applications you signed. There going to point the finger directly at you – because thats the only way they get out of this.

Even If They’re Guilty, You’re Still Liable

Heres the uncomfortable truth that most people dont want to hear. Even if your preparer is completly guilty – even if they fabricated everything without your knowledge – you’re still liable for the results.

Under federal law, you signed the application. You certified the information. You recieved the funds. Those facts create personal liability regardless of what the preparer did.

Tax law has a similar principle. Even if your preparer commits an egregious error or engages in fraudulent activity, you generaly remain liable for paying any additional tax, interest, and civil penalties. The preparers wrongdoing dosent excuse your obligations.

PPP fraud works the same way. You cant say “the preparer did it” and walk away. You signed. You certified. You benefited. Federal prosecutors dont care who calculated the numbers. They care who signed the application and who got the money.

That was you.

The Client List Is Now a Target List

When federal agents arrest your preparer, they dont just take the person into custody. They seize everything. The files. The computers. The phones. The client lists. Every document related to PPP applications.

Your name is on that list. Your application is in those files. Your tax returns – the real ones that show your actual income – are sitting right next to your PPP application with its inflated numbers.

Investigators are going through those files systematicaly. They compare every PPP application to the tax returns filed for that client. When the numbers dont match – and they often dont – that client moves from “file to review” to “target to investigate.”

By the time you hear about your preparers arrest, investigators may have already flagged your application. They may have already documented the discrepancies. They may already be building a case.

Your not learning about a new problem. Your learning about a problem thats been building for weeks.

The Text Messages They Already Have

When your preparer was arrested, federal agents seized there phone. Every text message. Every email. Every communication about PPP applications – including the ones you sent.

Think about what those messages might contain. Maybe you texted about the numbers on your application. Maybe you discussed how much money you’d recieve. Maybe you asked questions that showed you knew the application was being inflated. Maybe you sent documents the preparer used to create the false application.

All of that is now in federal custody. Investigators are reading every message. Prosecutors are building timelines. Your words – sent on a phone you no longer control – are being used to construct a case against you.

This is why talking to your preparer after you learn about there arrest is dangerous. Any new communication gets added to the file. Any attempt to coordinate stories becomes evidence of consciousness of guilt. The government isnt just looking at what you said before. There watching what you say after.

Your communications with the preparer already exist in federal evidence. You cant unsend them. You cant explain them away. The only way to deal with them is strategicaly – with an attorney who understands what your facing.

Same Charges, Same Penalties

Heres what shocks most people. Under federal law, clients who participate in preparer-facilitated fraud face the same charges as the preparer. Not reduced charges. Not lesser penalties. The same exposure.

The aiding and abetting statute – 18 USC 2 – treats people who aid or facilitate fraud as if they committed it directly. If you provided false information that ended up on a fraudulent PPP application, your not an accessory. Your a principal.

Wire fraud carries up to 20 years imprisonment. Bank fraud carries up to 30 years. Conspiracy to defraud the United States carries up to 5 years. Money laundering – if you spent the proceeds in certain ways – adds another 10 to 20 years depending on how its charged.

The preparer is looking at these numbers. And so are you. The fact that someone else physicaly submitted the application dosent reduce your exposure. You provided information. You signed the certification. You recieved and spent the funds. Under federal law, thats enough for the same charges the preparer faces.

The federal conviction rate for PPP fraud is 98.5%. If your charged, you will almost certainly be convicted. The only question is wheather you cooperate early enough to get a better deal – or wheather you wait until there are no deals left.

What to Do If Your Preparer Is Under Investigation

At Spodek Law Group, Todd Spodek and the federal defense team handle exactly this situation. Clients come to us after learning there preparer is being investigated, wondering wheather there next. Heres the advice we give.

First, understand that your not a bystander. Your preparers investigation potentialy includes you. Every application they prepared is being reviewed. Every signature is being analyzed. Every discrepancy between PPP claims and tax records is being documented.

Second, find your records. Locate your copy of the PPP application if you have one. Find your tax returns from 2019 and 2020. Compare the numbers. You need to know wheather there are discrepancies before investigators find them.

Third, stop communicating with your preparer. Dont call them. Dont text them. Dont discuss the situation. Any communication after you learn about the investigation can be characterized as conspiracy or witness tampering. Let the attorneys handle any necessary communication.

Fourth, dont destroy anything. If you have documents related to your PPP application – emails, confirmations, any communications with the preparer – keep all of it. Destroying evidence after learning about an investigation is obstruction. Obstruction often carries worse penalties then the underlying fraud.

Fifth, consult an attorney immediately. Not next week. Now. An attorney can assess your actual exposure, advise you on your rights, and potentialy begin discussions with prosecutors if early cooperation makes sense.

If your tax preparer is under investigation and you used there services for PPP, call Spodek Law Group at 212-300-5196. The consultation is confidential. We can help you understand wheather your application is likely to be flagged, what the investigation timeline looks like, and what options you have before prosecutors contact you.

Your preparer already made there choice. There cooperating. There naming clients. There pointing at files. There explaining exactly how each fraudulent application was prepared and who provided the false information. The question is wheather you wait for investigators to reach your name on that list – or wheather you get ahead of the situation while you still have options.