Criminal Defense Lawyers

What Criminal Intent Actually Means in Federal PPP Cases

Federal fraud isn’t just about wether the numbers on your application were wrong. Specific intent is what prosecutors have to prove—they have to show that you knowingly and willfully submitted false information with the goal of stealing money. This is way different from negligence or honest mistakes. Think about it like this: if you borrowed you’re neighbors lawnmower, forgot to return it, and they accused you of theft, the question isn’t “do they have their lawnmower back?” Its “did you intend to permanently deprive them of it when you took it?” That intent element is everything in federal fraud cases.

The legal term is mens rea—latin for “guilty mind.” In PPP fraud prosecutions, the DOJ must prove beyond a reasonable doubt that you had this guilty mind when you submitted you’re application in March or April 2020. They can’t just say “well, the payroll numbers were inflated by 30%, so obviously it was fraud.” They have to prove you KNEW those numbers were wrong AND you submitted them anyway because you wanted to steal. That’s a high bar, and its one that creates real oppurtunity for defense.

Here’s an example of lack of criminal intent in the PPP context: You owned a restaurant. In March 2020, the whole world shut down. You had 22 employees asking if there gonna be laid off. Your accountant calls you, says “the government just announced this PPP program, you probably qualify, let me pull together the paperwork.” You provide him with your best estimates of payroll—but your panicking, your not thinking clearly, and you give him numbers based off your pre-COVID projections, not your actual payroll from the previous 12 months. The accountant submits the application. You get the loan. You use every dollar to pay you’re employees and keep the lights on.

Was the application perfect? No. Did you have criminal intent to defraud the government? Also no. You were trying to survive, not steal. That distinction is what wins cases.

Compare that too someone who created a completely ficticious business, invented fake employees, submitted forged tax documents, and then immediatly spent the PPP money on a Lamborghini. Thats criminal intent. The prosecutor can point to the fake business, the forged docs, the luxury purchase—and argue “this person clearly intended to steal from the beginning.” But most PPP cases aren’t like that. Most involve business owners who were drowning in chaos, relied on professionals for guidence, and made errors under extreme duress.

Courts have recognized that mistakes aren’t crimes. Irregardless of how bad the error was, if you didn’t have the mental state required for fraud—the willfulness, the intent to decieve—then you haven’t committed a federal crime. This is why your defense attorney will spend so much time reconstructing what you were thinking and feeling in March-April 2020, not just what you did.

How to Prove You Lacked Criminal Intent: The Chaos Timeline Strategy

If your facing a PPP fraud investigation, you need to start gathering evidence of your lack of intent immediatly. This isn’t something you do later—this is something you do NOW, before memories fade and documents disapear. The single most powerful defense tool is what I call the “chaos timeline“—a detailed, hour-by-hour reconstruction of what you were experiencing in March and April 2020.

Here’s how you build it. Go back through every email, text message, calendar entry, and bank statement from January 2020 through June 2020. Print them out. Put them in chronological order. You’re looking for evidence that shows the absolute pandamonium you were dealing with when you submitted that PPP application. For example:

March 15, 2020: New York state shutdown order recieved. Your revenue drops 80% overnight.
March 16, 2020: Lost three major contracts totaling $280,000.
March 18, 2020: Fourteen employees asking if their being laid off, you don’t have answers.
March 20, 2020: Bank account shows $12,000 remaining. Payroll due March 25th is $45,000.
March 23, 2020: PPP program announced on the news. Forms available online.
March 24, 2020: Spent 3 hours trying to understand eligibility requirments on SBA website.
March 25, 2020: You’re accountant says “everyone in your industry is applying, you should too.”
March 26, 2020: Submitted PPP application while simultaneusly handling 47 employee questions and three vendor emergencies.

Look at that timeline. Does that look like someone who’s calmly planning a criminal scheme? Or does it look like someone who’s drowning and grabbing a life preserver? The chaos timeline proves lack of intent because it demonstrates that you didn’t have the TIME or mental capacity to form criminal intent. You were in survival mode, not fraud mode.

Defense attorneys who win PPP cases build these timelines meticulously. They show juries what it was REALLY like in March 2020—not what it looks like now, with 20/20 hindsight and 18 months of investigation. The timeline humanizes you. It shows your not a criminal, your a business owner who made decisions under the worst circumstances imagineable.

But the timeline is just the start. You also need to conduct a comprehensive communications audit. This is where things get scary—because you’re emails and text messages from 2020 are going to be either your best defense OR the prosecution’s smoking gun. There is no middle ground here.

Red flag communications that prosecutors love:

• “I know we don’t qualify but everyone’s doing it”
• “Should I inflate these numbers?”
• “Don’t tell the accountant the real revenue”
• “Delete this after you read it”
• Discussions of luxury purchases before loan approval

If you got communications like that—and I mean, lets be honest, some people do—you need to tell your attorney immediatly. Don’t hide them. The prosecutors WILL find them (they have subpoena power for all your emails, texts, WhatsApp, everything), and surprise is worse then preparation.

Exculpatory communications that help prove lack of intent:

• “I’m confused about how to calculate this, asking my CPA for help”
• “The lender said this approach is fine based off their review”
• “We’re using this for exactly what its intended for—payroll and rent”
• “I hope we qualified, I followed the instructions as best as I could”
• Evidence of genuine business distress and fear of bankruptcy

These communications are GOLD for your defense. They show you were trying to comply, you were relying on professional advice, you genuinely believed you qualified. Print these out. Highlight them. Give them to your attorney.

Next step: build your “advice chain.” This is every single person and source that told you the PPP application was acceptable. Your building a paper trail that shows you weren’t acting alone or in secret—you were following guidence from multiple authoritative sources. The advice chain is critical for proving lack of criminal intent.

Your advice chain should include:

1. SBA website guidance (use archive.org to get the EXACT pages as they appeared in March 2020)
2. Your lender’s specific instructions (save every email they sent you)
3. Your accountant’s advice (get their contemporaneus notes from March-April 2020)
4. Industry association guidance (many trade groups sent PPP guides to members)
5. Government officials’ public statements (Treasury Secretary, SBA Administrator encouraging “broad application”)

The more layers of official guidence you relied on, the harder it is for prosecutors to prove criminal intent. Your attorney will argue: “Your Honor, my client relied on the SBA’s published guidance, a licensed CPA’s advice, an SBA-approved lender’s instructions, their industry association’s reccomendations, and public statements from the Treasury Secretary. At what point does reliance on five authoritative sources negate criminal intent?”

That’s a powerful argument. It basically says “if five different official sources told me I was doing it right, how can the government now say I INTENDED to do it wrong?”

Finally, you need to document your mental state at each critical timepoint. Criminal intent requires proving what you BELIEVED at the time you submitted the application, not what you know now after months of investigation and attorney consultations. There are three critical timepoints:

1. Application submission (April 2020): What did you beleive then about your eligibility?
2. Loan funding (May-June 2020): What did you think when the money arrived?
3. Loan usage (May-August 2020): How did you use the funds, and what did you believe was proper usage?

Write a detailed narrative answering these questions. Be honest. If you thought you were in a gray area but your accountant assured you it was fine, SAY THAT. If you were genuinely confused by the eligibility requirements but did you’re best based off the guidance available, SAY THAT. This narrative becomes the foundation of you’re intent defense—it shows what you were actually thinking at the time, not what prosecutors are now claiming you must have been thinking.

The “My Accountant Did It” Defense: Why Its Failing and What Works Instead

I’m gonna be real with you here. The “my accountant did it” defense is failing MISERABLY in federal courts across the country. Judges are flat-out rejecting it, and prosecutors are prepared for it. So if you’re thinking “I’ll just blame my CPA and walk away,” you need to understand why that doesn’t work—and what DOES work instead.

The legal principle is simple: you cannot delegate criminal responsibility to a professional. Courts have ruled consistantly that hiring an accountant doesn’t absolve you of responsibility for what’s on an application you signed. Even if your accountant filled out every single line, you signed it under penalty of perjury. That signature means “I swear this is true.” You can’t say “well, I didn’t read it” or “my accountant told me it was fine so I just signed.”

Federal judges don’t accept that. There’s been cases where defendants say “my accountant prepared everything, I trusted him,” and judges have basicly responded “you’re a business owner, you’re responsible for understanding what you sign.” The “accountant did it” defense sounds like your trying to escape accountability, which makes judges and juries LESS sympathetic, not more.

But—and this is crucial—there IS a way to use professional reliance in your defense. You just have to frame it completely different. Your not saying “my accountant did it, so I’m not guilty.” Your saying “I relied on my accountant’s advice as EVIDENCE that I lacked criminal intent.”

See the diffrence? Its subtle but critical.

The failing approach: “I didn’t know what I was doing, my accountant handled everything, its not my fault.”

The successful approach: “I was genuinely confused about eligibility requirements. I consulted a licensed CPA with 20 years experiance. He reviewed my financials and advised me that I qualified. I relied on his professional judgement in good faith. That reliance proves I didn’t have intent to defraud—I was trying to comply by seeking expert guidence.”

You see how the second version is different than the first? Your not delegating responsibility. Your acknowledging you signed the application, but your using the professional advice as PROOF that you’re mental state was one of good faith compliance, not criminal intent.

Courts have accepted professional reliance as evidence of lack of intent when its presented correctly. The key is showing:

1. You genuinely didn’t understand the requirements
2. You sought advice from a qualified professional (not your buddy who “knows about loans”)
3. You provided complete and accurate information to that professional
4. You relied on their advice in good faith
5. The advice was reasonable based off the guidance available at the time

If you can prove all five of those elements, than professional reliance becomes powerful evidence of lack of intent. But if you just say “my accountant did it” without proving those five things, your gonna loose.

Here’s what you need to do RIGHT NOW if your planning to use professional advice in your defense:

Get your accountant’s contemporaneus notes from March-April 2020. What did they write down when you first consulted them? What analysis did they do? Did they review IRS guidance, SBA rules, lender requirements? Get all of it.

Document every conversation you had with them. Pull emails, call logs, text messages. You want to show ongoing consultation, not just “I hired them and they handled it.”

Prove you gave them accurate information. If you provided tax returns, bank statements, payroll records to your accountant, save all of that. It shows you weren’t hiding anything—you were giving them the real data and asking for their professional analysis.

Get a declaration from the accountant. This is tricky because there CPA might not want to get involved, but if you can get them to write a declaration saying “my client consulted me, provided accurate information, and I advised them they qualified based on my analysis of the SBA guidance,” that’s incredibly valuable.

Bottom line: professional reliance works as evidence of lack of intent, not as a way to escape responsibility. Frame it right, and it strengthens you’re case. Frame it wrong, and judges will think your trying to blame someone else for your own decisions.

The Terrifying Reality: What Happens If Intent Defense Fails (and Why It Usualy Doesn’t Have To)

I’m not gonna sugarcoat this. If your convicted of federal PPP fraud, the consequences are devastating. Like, life-altering. Your looking at federal prison time—and I don’t mean a few months in a minimum security facility. The federal sentencing guidelines for fraud are based on the “loss amount,” which in PPP cases is the amount of the loan. If you got a $200,000 PPP loan, the guidelines start at 15-21 months. If it was over $500,000, your looking at 30-37 months. And thats just the starting point—add “sophisticated means,” add “multiple victims,” add “abuse of a position of trust,” and the sentence can climb to 5, 7, even 10 years.

Federal prison isn’t like county jail. Your not close to home. Your probly gonna be sent to a facility in another state. Your gonna be away from you’re spouse, your kids, your business, your life. Your employees will lose their jobs because the business will collapse without you. Your family’s gonna struggle financialy. Your reputation—everything you built over 20, 30 years—gone. Reduced to a court docket number and a press release on the DOJ website.

And it doesn’t end when you get out. Restitution is mandatory—you have to pay back the full amount of the loan, even if you spent it on legitimate business expenses. Plus fines. Plus costs. You could be looking at $200,000, $300,000, $500,000 in financial penaltys even after you serve your time. You can’t discharge it in bankruptcy. It follows you for the rest of you’re life.

The collateral consequences are almost worse then the prison time. You’re a convicted felon now. Background checks will show that forever. Good luck getting a job—most employers won’t hire convicted fraudsters. Good luck getting professional licenses reinstated. Good luck getting a loan to restart you’re business. Your basically starting over at age 45 or 50 or 55 with a felony conviction and no money and no reputation.

Your kids are gonna Google your name and see news articles about how “Local Business Owner Sentenced to Prison for PPP Fraud.” Your spouse—assuming they stuck with you through the trial—is gonna be dealing with the financial devastation while your locked up. Your parents are gonna have to visit you in federal prison and see there son or daughter in a jumpsuit behind plexiglass. Its not just YOU who pays the price. Your whole family does.

I’ve talked to people who say “I wish I had died in a car accident instead of going through this.” Thats how bad it is. The shame, the guilt, the destruction of everything you worked for—it breaks people.

But here’s the thing—and this is critical—most of this can be avoided if you act RIGHT NOW. Not next month. Not after the holidays. NOW.

There’s a 60-day window that most people don’t know exists. Its the window between when the government starts investigating you and when they indict you. If you get a grand jury subpoena, if the FBI shows up at your door, if your bank notifies you that federal agents are asking questions—that’s your warning. You have aproximately 60 days to make a pre-indictment presentation to the prosecutor.

This is your single best chance to avoid charges entirely. Once your indicted, prosecutors have institutional pressure to secure a conviction. They don’t want to look weak by dismissing charges. But BEFORE indictment, they can decline to prosecute with zero public embarrasment. They can just say “we investigated and determined charges weren’t warranted.” Case closed. No one ever knows.

A pre-indictment presentation is where your attorney submits a detailed package to the prosecutor showing why you lacked criminal intent. It includes:

1. Your complete chaos timeline from March-April 2020
2. All exculpatory communications (the “good” emails and texts)
3. Expert accountant letter explaining any errors as reasonable misinterpretation of confusing guidance
4. Character letters from employees you kept employed with PPP funds
5. Evidence of legitimate business need and proper fund usage
6. Comparative case analysis showing similar cases were declined or dismissed
7. Offer of voluntary repayment if applicable

This package is designed to make the prosecutor think: “You know what, this isn’t actually a criminal. This is a business owner who made mistakes during a chaotic time. We have bigger fish to fry.” And here’s the thing—in late 2025, prosecutors DO have bigger fish. There approaching the statute of limitations on hundreds of PPP cases. There triaging. Cases under $150,000 with no aggravating factors are increasingly being declined because the cost of prosecution ($300,000-$500,000 in DOJ resources) exceeds any possible recovery.

If your PPP loan was under $150,000, and you don’t have aggravating factors (no multiple loans, no completely fake business, no Lamborghini purchase, no prior fraud history), than your attorney should be making the prosecutorial economics argument HARD. “Your Honor, my client received an $80,000 loan. The government will spend $400,000 prosecuting this case for a maximum recovery of $80,000. My client is offering to repay the full amount plus interest right now. Why is the DOJ wasting taxpayer money on this when there are multi-million dollar PPP fraud cases waiting?”

That’s a powerful argument in 2025. Prosecutors know there running out of time, and there making cost-benefit calculations on every case. Use that leverage.

But you only get that 60-day pre-indictment window if you act fast. Once your indicted, its to late. Your in the system. The train has left the station. So if you’re reading this because you got a subpoena last week, STOP READING and call a federal criminal defense attorney TODAY. Not Monday. Today.

Look, I’m not saying its guaranteed that a pre-indictment presentation will get your case declined. But I AM saying its your best shot. I’ve seen cases where prosecutors were 100% planning to indict, and then the defense attorney submitted a compelling pre-indictment package showing lack of intent, and the prosecutor said “actually, yeah, this doesn’t meet our threshold for criminal prosecution.” Case closed. No indictment. No trial. No prison. Life goes on.

Thats why the 60-day window matters so much. Miss it, and your looking at years of hell. Use it, and you might walk away.

Geographic Reality: Why Where You’re Prosecuted Determines Your Outcome

Here’s something most people don’t realize: not all federal courts treat PPP fraud cases the same way. Where your prosecuted matters ENORMOUSLY. The Southern District of New York is notorious for harsh PPP prosecutions—there treating these cases like organized crime. Meanwhile, districts that got hammered during COVID (Louisiana, Michigan, parts of Florida) are much more sympathetic to the “chaos defense.”

There’s basically a geographic intent spectrum. On one end, you got SDNY and the Central District of California. These districts are prosecuting aggressivly, seeking long sentences, rejecting lack of intent arguments. Judges in these districts have made comments like “PPP fraud is theft from taxpayers during a crisis” and there not sympathetic to business owners who claim confusion.

In the middle, you got districts like Northern District of Texas and Northern District of Illinois. Case-by-case basis. Some judges are harsh, some are sympathetic. Depends on judge assignment, which is basically a lottery.

On the other end, you got districts where judges and juries personally experienced the COVID business crisis. Louisiana got devastated by COVID. Businesses collapsed. Judges SAW what happened in there communities. There more likely to accept arguments that March-April 2020 was chaos and people made errors under duress. Same with Michigan, same with parts of Florida.

If charges haven’t been filed yet, your attorney may be able to influence venue based on where the “conduct occurred.” If you submitted the application from you’re Florida office but the loan was funded by a bank in Texas, there could be venue options. This is complicated and requires an experienced federal criminal defense attorney, but it matters.

If charges HAVE been filed and venue is set, the next critical variable is judge assignment. Judges are assigned randomly in federal districts, but once assigned, that judge will handle your case from start to finish. And different judges have VERY different views on PPP fraud.

Here’s what you need to do immediatly: research your assigned judge. Go to PACER and look at how they’ve ruled on similar cases. Did they grant motions to dismiss based on lack of intent? Did they impose harsh sentences or lenient ones? Did they give any public statements during 2020 about small business struggles?

For example, if your judge made a public speech in April 2020 talking about how “small businesses are the backbone of our community and we need to support them during this crisis,” that’s GOLD for your defense. Your attorney can cite that in motions, basically saying “Your Honor, you recognized in April 2020 how difficult this was for business owners. My client was one of those struggling owners you were talking about.”

On the other hand, if your judge has a history of imposing maximum sentences in fraud cases and rejecting lack of intent defenses, you need to know that going in. It effects you’re strategy. Maybe you negotiate harder for a plea deal. Maybe you prepare for trial knowing the judge won’t be sympathetic. Knowledge is power.

The other geographic factor is evolving case law by circuit. In late 2025, we’re seeing circuit splits on PPP fraud intent standards. The Ninth Circuit has been more defense-friendly, requiring prosecutors to prove defendants knew the specific representations were false. The Second Circuit has been harsher, allowing convictions based on “willful blindness” (which is basically “you should have known even if you didn’t actually know”). If your in the Second Circuit (New York, Connecticut, Vermont), you’re facing an uphill battle compared to someone in the Ninth Circuit (California, Oregon, Washington, etc.).

Bottom line: geography matters more then most people realize. Two identical cases with identical facts can have completely different outcomes based solely on whether there prosecuted in Louisiana versus New York. If you got options on venue, use them. If you don’t, at least know what your up against based on where you are.

One more thing: find your “factual twin.” This is a case thats already been resolved with facts similar to yours. Similar loan amount, similar alleged misrepresentation (employee count, payroll, revenue), similar defendant profile (first-time offender, business owner, no prior fraud). Use PACER to search for these cases. Look at how they were resolved. Dismissals? Plea deals? Trial verdicts? Sentences?

This data is critical for setting realistic expectations and negotiation strategy. If you find five cases similiar to yours in your district and four of them got dismissed based on lack of intent, that’s powerful information your attorney can use. “Your Honor, this court has dismissed four cases with facts substantially similiar to my client’s. Consistency requires the same result here.”

Conversly, if you find that every case like yours resulted in convictions and 30-month sentences, you need to know that. It effects whether you take a plea deal, what sentence your facing if you go to trial and loose, all of it.

The factual twin analysis is something most defendants don’t do, but it can change the trajectory of your case. Have your attorney pull 5-10 comparable cases and analyze the outcomes. Its worth the few hours of legal research time.

What You Do Right Now

If your facing a PPP fraud investigation or charges, you don’t have time to waste. Every day you wait is a day closer to indictment, closer to trial, closer to losing the 60-day pre-indictment window. Here’s exactly what you need to do, starting TODAY:

First, hire a federal criminal defense attorney who has experience with PPP fraud cases specifically. Not just “white collar crime” generically. You need someone who understands the PPP program, the SBA regulations, the evolving case law, the prosecutorial economics, all of it. This isn’t a DUI—this is complex federal fraud, and you need a specialist.

Second, start building your chaos timeline and communications audit TODAY. Don’t wait for you’re attorney to ask for it. Pull every email, text, calendar entry, bank statement from January 2020 through December 2021. Organize it chronologically. This is gonna take time, so start now.

Third, document your advice chain. Who told you the application was proper? Your accountant? Your lender? The SBA website? Trade association guidance? Write it all down with dates and specifics. Get declarations from these people if possible.

Fourth, if you haven’t been indicted yet, push your attorney to prepare a pre-indictment presentation ASAP. You’ve got aproximately 60 days from when the investigation started. Don’t waste them.

Fifth, research your judge if one’s been assigned. Look at they’re history with similar cases. Understand what your up against based on geography and judicial temperment.

And finally—and I can’t stress this enough—be honest with your attorney about everything. Every bad email. Every inflated number. Every potential problem. Your attorney can’t defend you if there surprised at trial by evidence they didn’t know existed. Prosecutors will find EVERYTHING. The only question is whether your attorney knows about it first so they can prepare, or whether it blindsides them in court.

The difference between prison and freedom in PPP cases often comes down to proving lack of criminal intent. But you can’t prove it if you don’t gather the evidence, build the timeline, and make the arguments. Lack of intent is your best defense, but its not a magic wand. It requires work, strategy, and acting fast.

Your life isn’t over. Not yet. But it will be if you don’t move NOW.