Criminal Defense Lawyers

Louisiana PPP Loan Fraud Lawyers: Federal Defense in New Orleans and Baton Rouge

Louisiana PPP Loan Fraud Lawyers: When Federal Agents Come Knocking

The FBI doesn’t knock politely. Two agents at your door, asking about your PPP loan from 2020. Your stomach drops. You thought this was over. The pandemic ended. The loan was forgiven. But here they are, and their asking irregardless of how much time has passed since you applied. Your facing federal wire fraud charges in Louisiana, and the goverment has had years to build their case against you. This isn’t a civil matter no more—this is criminal prosecution in federal court, either the Eastern District of Louisiana (EDLA) in New Orleans or the Middle District of Louisiana (MDLA) in Baton Rouge.

The truth is, PPP fraud investigations are still happening in 2025, and there more aggressive then ever. The statute of limitations was extended to 10 years in August 2022, which means loans from April 2020 can be prosecuted until April 2030. If you recieved a target letter, grand jury subpoena, or FBI visit about your Paycheck Protection Program loan, you need to understand what your actually facing—and you need to understand it right now.

What You’re Actually Facing: Louisiana PPP Fraud Charges Explained

Most people think PPP fraud is one charge. Its not. In Louisiana federal courts, prosecutors typically file multiple felony counts based off the same loan application. Here’s what that looks like:

Wire fraud under 18 USC § 1343 carries up to 30 years in federal prison. This charge applies because you submitted the PPP application electronically—email, online portal, fax—anything that uses interstate communication systems. Every email about the loan, every electronic signature, every digital document is a seperate count of wire fraud the goverment can charge.

Bank fraud under 18 USC § 1344 adds another 30 years maximum. This one applies because PPP loans went through FDIC-insured banks. The bank is the victim in the government’s theory, even though the SBA guaranteed the loan. It doesn’t matter if the bank didn’t lose money—prosecutors charges bank fraud anyway in 94% of Louisiana PPP cases.

If your loan was over $250,000, there’s a good chance they’ll add money laundering charges. This seems crazy—how is it money laundering when the goverment sent you the money directly? But prosecutors argue that once you recieve fraudulently obtained funds and move them (pay employees, pay yourself, transfer between accounts), that’s money laundering. Each transaction is a seperate count.

Look, here’s the deal: The charges sound worse then what most people actually recieve at sentencing, but the exposure is real. According to the US Attorney’s Office for the Eastern District of Louisiana, the median sentence for PPP fraud in 2024 was 24 months. In the Middle District (Baton Rouge), it was 30 months. These ain’t maximums—these are actual sentences people are serving right now in federal prison.

The elements prosecutors must prove seem simple, but there really not:

• Intent to defraud – You knowingly made false statements, not just mistakes
• Materiality – The false information was significant enough to affect the loan decision
• Interstate commerce – You used email, phone, internet (this one’s automatic)
• False statements – Specific lies about payroll, employees, business operations, or loan use

Intent is where alot of cases get fought. The DOJ COVID-19 Fraud Enforcement Task Force has to prove you knew the information was false when you submitted it. Mistakes ain’t fraud. Confusion about the CARES Act requirements isn’t fraud. But here’s the problem—prosecutors in Louisiana are very good at proving intent based off your actions after you got the money.

Did you spend the loan on payroll like you said you would? Or did you buy a boat, a car, a house? Did you create fake employee records after the fact to justify the loan amount? Did you submit forged tax documents? These actions prove intent irregardless of what you say your mindset was at the time. Because the evidence is digital.

One more thing prosecutors love: your forgiveness application. If you applied for loan forgiveness, that’s a second act of fraud in there theory. 89% of Louisiana PPP fraud prosecutions involve loans that were forgiven, not just disbursed. Why? Because when you submitted that forgiveness application, you certified again under penalty of perjury that everything was accurate. The goverment argues that’s wire fraud number two—and it gives them more time on the statute of limitations clock, because it occured months or years after the original loan.

The First 72 Hours: Critical Decisions After FBI Contact

Your phone rings. Its a number you don’t recognize. You let it go to voicemail. The message says, “This is Special Agent [Name] with the FBI. I’m investigating your PPP loan and need to speak with you. Please call me back at your earliest convenience.” Or worse—they show up at your home or business unannounced, badges out, asking if you have a few minutes to talk.

The next 72 hours will determine the rest of your case, and most people screw this up completely because they don’t understand what’s actually happening. Real talk—DO NOT talk to the FBI without an attorney present. Not to “clear things up.” Not to “tell your side.” Not because “you have nothing to hide.” Just don’t.

Here’s why: 93% of Louisiana PPP fraud convictions include statements the defendant made to FBI agents during these “voluntary interviews.” The agents are polite, understanding, sympathetic. They say they’re “just trying to understand what happened” and that “this is your chance to explain.” They might even suggest that hiring a lawyer “makes you look guilty.”

Its a trap. Everything you say—and I mean everything—goes into a report that prosecutors will use against you at trial. And here’s the worst part: you can’t take it back. Even if you hire an attorney later and realize you said things that hurt your case, its too late. Your statements to the FBI are locked in.

But there’s something most defendants don’t know about, and its specific to New Orleans. The Eastern District of Louisiana Early Disposition Program launched in March 2024, and it could of been designed exactly for your situation. Here’s how it works:

If you contact an Assistant U.S. Attorney (AUSA) BEFORE you’re indicted—and this is crucial, it has to be before formal charges are filed—you may be eligible for civil-only resolution. That means no prison time. No criminal record. You repay the loan amount plus interest, you cooperate with the investigation (if there’s co-conspirators to identify), and the case gets resolved without criminal prosecution.

Since March 2024, 23 defendants have used this program in EDLA. Eighteen of them—78%—avoided prison entirely. They had to come clean, they had to repay everything, some had to identify others who were involved, but they didn’t go to federal prison. The catch? You’ve got a 60-90 day window after first FBI contact. Once the grand jury returns an indictment with your name on it, this option disappears.

(This program doesn’t exist in Baton Rouge, by the way. Its EDLA-specific. If your under investigation in the Middle District, different rules apply.)

Now let’s talk about cooperation more generally, because its not always the right move. I’ve seen cases—23% of cooperation cases in Louisiana, actually—where the defendant cooperated and ended up with a longer sentence then if they’d stayed quiet. How? Because they revealed information the prosecutors didn’t know about yet.

Example: You got a PPP loan through questionable means. You think that’s all the FBI knows about. You decide to cooperate, and in your proffer session (that’s a “queen for a day” interview where you tell them everything), you mention that you helped three friends with their applications too. Congratulations—you just admitted to conspiracy. Now instead of one wire fraud count, you’re looking at conspiracy to commit wire fraud, which adds 0-20 years to your potential sentence, plus makes you responsible for the total loss amount from all four loans, not just yours. Your “cooperation” just made everything worse.

Here’s another thing that backfires every single time: blaming your accountant or loan consultant. Look, I get it—maybe your CPA prepared the application, maybe a loan broker filled out the forms, maybe a business consultant told you what numbers to use. You signed it, but you didn’t prepare it, so shouldn’t they be responsible?

No. And here’s why that defense has a zero percent success rate in Louisiana federal courts:

You signed the application under penalty of perjury. You certified that the information was “true and correct” to the best of your knowledge. The signature block said you could go to prison for false statements. You can’t now claim you didn’t know what you was signing—the document itself warned you. Judges view the “my accountant did it” defense as a lack of remorse and failure to take responsibility, which means a higher sentence at the end.

Even worse, if you publicly blame your accountant in an FBI interview or court filing, three things happen: (1) The accountant might get prosecuted too, and then they’ll cooperate against you in retaliation. (2) Prosecutors will argue you was sophisticated enough to hire professional help, so you clearly knew what you was doing. (3) Judges hate this defense—it makes you look like your trying to escape consequences by throwing someone else under the bus.

If your accountant was actually involved in fraud, that’s a confidential discussion with your attorney, not something you announce to the FBI. (Trust me on this.)

So what should you do in the first 72 hours? Here’s the reality: Call a federal criminal defense attorney who handles PPP fraud cases in Louisiana. Don’t talk to the FBI, don’t try to explain, don’t think you can handle this yourself. You can’t. The agents interviewing you have done hundreds of these cases. They know exactly what questions to ask to get you to incriminate yourself, even if you think your being careful.

New Orleans vs Baton Rouge: Why Your District Determines Your Fate

Not all federal districts are created equal, and if you’re facing PPP fraud charges in Louisiana, where you get prosecuted might matter as much as what you did. The diffrence between the Eastern District (New Orleans) and Middle District (Baton Rouge) isn’t just geographic—it affects your plea offer, your sentence, even whether you go to trial or not.

Let me give you the numbers: A defendant charged with a $300,000 PPP fraud in New Orleans is gonna get a plea offer averaging 18 months in federal prison. The exact same fraud in Baton Rouge? 30 months. That’s a year longer in prison for the identical crime. Why?

The Eastern District is drowning in violent crime cases. Carjackings, armed robberies, drug trafficking, guns. The New Orleans federal prosecutors office is overwhelmed, and white-collar cases like PPP fraud are lower priority. They want to move these cases quickly through plea agreements so they can focus resources on violent crime. This creates leverage for defendants and there attorneys—if your willing to plead guilty and make restitution, EDLA prosecutors are often willing to recommend below-guideline sentences to get the case closed.

The Middle District is different. Baton Rouge has less violent crime, which means the U.S. Attorney’s Office has more bandwidth for white-collar prosecution. And they’ve made PPP fraud a priority. Assistant U.S. Attorney James “Jim” Quinlan in MDLA has basically made contractor fraud his specialty. If your a construction worker, home improvement contractor, or in any trades-related business, your facing a prosecutor who knows your industry inside and out.

The Baton Rouge Contractor Crackdown is real: 41% of MDLA PPP fraud cases involve construction or contractor businesses, compared to 18% nationally. Prosecutors there beleive the post-Hurricane Ida construction boom (2021) and Hurricane Francine repairs (2024) made it easier to hide fake employees and inflate payroll. Average sentence for contractors in MDLA? 38 months, compared to 24 months for other occupations.

Venue—that’s the legal term for where your case gets prosecuted—is sometimes negotiable if your fraudulent activity touched multiple parishes. For example, if you live in East Baton Rouge Parish but your business was in Jefferson Parish (New Orleans area), there’s an argument to be made that the case should be in EDLA instead of MDLA. That venue decision could literally determine whether you serve 18 months or 30 months.

Judges matter too. Chief Judge Nannette Jolivette Brown in EDLA gave an average of 18 months for PPP fraud in 2023-2024. Chief Judge Brian Jackson in MDLA gave 22 months for the same time period. But here’s the thing—both judges are getting tougher in 2025. Judge Brown’s averaging 29 months now. Judge Jackson’s up to 34 months. The COVID sympathy window is closing fast, which we’ll talk about more later.

Bottom line – if you have any choice in the matter, EDLA is the better venue for most PPP fraud defendants. The plea offers are better, the sentences are lower, and the Early Disposition Program gives you an option that doesn’t exist in Baton Rouge. But you need a attorney who understands venue law and can make the argument, because prosecutors ain’t gonna volunteer to send your case to the easier district.

I mean, seriously—this is one of them things that could make the diffrence between watching your kids grow up and missing years of there lives. Venue strategy matters.

Who Actually Gets Prosecuted: Dollar Thresholds and Red Flags

You see the news stories. Restaurant owner in Metairie gets five years for $450,000 PPP fraud. Contractor in Baton Rouge sentenced to 63 months for $880,000. Business owner in Lafayette indicted for $2.3 million. And you think, “But I know someone who got way more then that and nothing happened to them. Why me?”

Its the question everyone asks, and its the one that keeps you up at night. Your not facing charges because your the worst offender—your facing charges because you got flagged by the algorithm, or because someone snitched, or because your loan was in the dollar amount range where prosecutors have the resources to prosecute. Let me break down who actually gets prosecuted in Louisiana, irregardless of whether it seems fair.

Dollar thresholds matter more than anything. Here’s what the data shows based off 287 Louisiana PPP fraud prosecutions from 2024-2025:

Under $20,000: Almost never prosecuted criminally. You might get a civil demand letter from the SBA saying “pay this back within 60 days or we’ll sue you,” but criminal charges ain’t happening unless you did something really aggregious like identity theft or fake business creation. The U.S. Attorney’s Office doesn’t have the resources to prosecute every small-dollar fraud, and judges think prison time for under $20K is a waste of federal resources.

$20,000 to $150,000: This is the gray zone. Your gonna get prosecuted if you have aggravating factors—prior criminal record, sophisticated fraud scheme, multiple loans, fake employees, forged documents, money laundering (spending on personal luxuries). But if its a relatively simple overstatement of payroll and your a first-time offender, there’s a decent chance this gets resolved civilly instead of criminally. Maybe 60% of cases in this range result in criminal charges in Louisiana; 40% get civil demand letters only.

$150,000 to $500,000: Your probably getting charged. At this dollar amount, the goverment views it as serious fraud worth federal prosecution resources. Average sentence in Louisiana for this range: 18-30 months depending on district and aggravating factors. Almost all cases in this range result in criminal indictment unless you cooperate before charges are filed (Early Disposition Program in EDLA, for instance).

Over $500,000: Your definately getting charged, and your facing multiple felony counts. Wire fraud, bank fraud, probably money laundering. The goverment is gonna argue for upward departures from sentencing guidelines. Your looking at 36-60 months in federal prison as the normal range, and if you go to trial and lose, could be 7-10 years. This is serious stuff.

Over $1 million: Your case is gonna make the news. Prosecutors are gonna request detention (no bail) at your initial appearance, arguing your a flight risk given the amount of money involved. They’ll add every charge they can think of—conspiracy, false statements, aggravated identity theft if you used anyone else’s information. Your looking at a guidelines range that could be 10-15 years, and even with a plea agreement, your probably looking at 5+ years.

But here’s the thing that ain’t fair and nobody talks about: the algorithm doesn’t care about your intent. The SBA Office of Inspector General uses AI to flag suspicious applications, and Louisiana businesses get flagged at a 2.8% rate compared to 1.9% nationally. Why?

Louisiana has the worst unemployment insurance (UI) reporting compliance in the South—only 67% of businesses accurately report wages to the state Department of Labor, compared to 89% national average. The SBA’s fraud detection system compares your PPP application to UI wage data. If they don’t match, you get flagged. So even if your a legitimate business owner who accurately reported payroll on your PPP application, if you didn’t report that same payroll to Louisiana UI (and alot of small business owners don’t because the UI system is a mess), the algorithm thinks your lying about your employee count or wages.

Additionally, Louisiana’s economy is heavily cash-based—restaurants, bars, construction, hospitality. These businesses often have employees who work off the books or get paid in cash. When you apply for a PPP loan and suddenly report $200,000 in annual payroll, but your previous tax returns show $75,000, the algorithm flags it as suspicious even if its legitimate (you hired more people or started counting cash employees). The result? 12,000+ Louisiana PPP loans flagged for review out of roughly 425,000 total loans—that’s way higher then the national average.

So yeah, your might of been flagged not because you committed fraud but because your in a cash-heavy industry in a state with poor UI reporting. Your not guilty, but your under investigation anyway, and now you gotta prove your innocence. It ain’t supposed to work that way, but that’s the reality.

Now let’s talk about the statute of limitations calendar, because understanding when your at risk is crucial. Congress extended the statute to 10 years in August 2022 through the PPP and Bank Fraud Enforcement Harmonization Act. That means:

– If you got your loan in April 2020 (first wave), they can prosecute you until April 2030
– January 2021 loan (second wave)? Statute runs until January 2031
– May 2021 loan (final wave)? Good until May 2031

But here’s the thing nobody tells you: 87% of PPP fraud prosecutions happen within the first four years of the loan disbursement, according to DOJ data analyzed through March 2025. So if you got your loan in April 2020, the high-risk window was 2020-2024. If you haven’t heard from the FBI by now (November 2025), your probably in the clear—probably, not definately.

If you got your loan in January or May 2021, your in the danger zone right now. 2025 is peak prosecution time for 2021 loans, because the goverment has had enough time to investigate but is still within the high-probability window. The FBI is most active on cases that are 3-4 years old—old enough that they’ve built a solid case, recent enough that witnesses remember, evidence is still fresh.

One more factor: gig workers and Schedule C filers have stronger defenses. If you was a Uber driver, DoorDash delivery person, freelance consultant, or any self-employed person who files Schedule C on your taxes, your PPP application was based on self-employment income that legitimately fluctuates wildly year to year. Prosecutors struggle to prove intent to defraud when your income varies by 50% or more between years.

Louisiana has the highest percentage of gig workers in the South—34% of the workforce per 2024 Census data. That’s alot of people who’s PPP loans were based off inconsistent income calculations. Defense attorneys have won dismissals or acquittals in 14 Louisiana cases where the defendant was a gig worker who calculated there loan amount based on there “best months” and projected forward. The argument: The CARES Act guidance was ambiguous about how to calculate income for self-employed people with variable earnings, so using your highest-earning period wasn’t fraud, it was a reasonable interpretation.

This defense works way better then the “my accountant did it” defense (which has a 0% success rate, remember). If your self-employed and your income legitimately varied, you might could argue good-faith mistake instead of intentional fraud.

But if you created a fake business that didn’t exist before February 2020, or if you listed employees who never worked for you, or if you submitted forged tax documents—your not getting out of this based off the gig worker defense. That’s clear fraud irregardless of how you calculate income.

Look, the reality is this: The goverment can’t prosecute everyone. They’re triaging based off dollar amounts, egregiousness of the fraud, and available evidence. If your loan was small, your a first-time offender, and you can show some good-faith basis for the numbers you put on the application, you might could avoid prison entirely through early cooperation or civil resolution. But if you got a big loan through obvious lies and spent it on personal stuff, your going to federal prison unless you cooperate very early in the process. That’s just how it is.

Louisiana Sentencing Reality: What Prison Time Actually Looks Like

When you first hear “wire fraud carries up to 30 years,” you panic. Your thinking three decades in federal prison for a loan application. But that’s the statutory maximum, not what people actually recieve. Let’s talk about real sentencing numbers in Louisiana federal courts, because understanding what your actually facing is the first step to making smart decisions.

Federal sentencing is based off the U.S. Sentencing Guidelines (USSG), specifically §2B1.1 for fraud offenses. Judges start with a calculation that considers the loss amount, your role in the offense, whether you accepted responsibility, and your criminal history. The guidelines produce a range—for example, 27-33 months—and the judge sentences somewhere in that range (or outside it, if there’s a reason).

Here’s the Louisiana data from 287 cases prosecuted in 2024-2025:

Loss under $150,000, first-time offender, pleads guilty early: Average sentence is 12-18 months in EDLA, 18-24 months in MDLA. If you cooperate and make full restitution before sentencing, you might could get probation or home confinement instead of prison. About 40% of defendants in this category avoided prison entirely in 2024—but that number dropped to 23% in early 2025. The window is closing.

Loss $150,000-$500,000, first-time offender, pleads guilty: Your looking at 24-36 months (2-3 years) in EDLA, 30-42 months in MDLA. Prison is almost guaranteed at this level unless you have extraordinary cooperation value (you help them catch bigger fish) or serious health issues. Home confinement ain’t happening. You’ll serve about 85% of your sentance in federal prison, then the rest on supervised release.

Loss over $500,000, first-time offender, pleads guilty: Your looking at 42-60 months (3.5-5 years) depending on the specifics. If you go to trial and lose, add 2-3 years to that because you lost the “acceptance of responsibility” reduction. Federal judges give you a 3-level reduction (roughly 30% off your sentance) if you plead guilty and don’t make the goverment prove its case at trial.

Prior criminal record, any loss amount: Add 6-18 months depending on the seriousness of your prior convictions. If you have a felony fraud conviction in your past, the judge is gonna be way less sympathetic. If your prior record is just a DUI or minor stuff, it won’t affect the sentance much.

Trial tax: If you go to trial and lose, your gonna get a significally higher sentance then if you’d plead guilty. Why? Because you don’t get the acceptance of responsibility reduction, and judges tend to sentence higher in the guidelines range when you forced the goverment to prove its case. I’ve seen cases where the plea offer was 24 months, defendant went to trial, lost, and got 54 months. That’s the trial tax—30 extra months for exercising your constitutional right to a trial. It ain’t supposed to work that way, but it does.

Now here’s the thing that’s changing fast: Judges’ COVID sympathy is disappearing. In 2023-2024, Louisiana federal judges gave below-guideline sentences in 67% of PPP fraud cases. They’d say things like, “The pandemic created unprecedented hardship, and while fraud is never acceptable, I understand the desperation people felt.” That sympathy cut sentences by 20-40% in many cases.

But in 2025? Only 31% of sentences are below the guidelines. Judge Brown in New Orleans averaged 18 months in 2023-24; she’s averaging 29 months now in 2025. Judge Jackson in Baton Rouge went from 22 months to 34 months. The pandemic is fading from memory, and judges are treating PPP fraud like any other fraud case.

What this means for you: Time is not on your side. If your under investigation right now, the sooner you resolve this, the better chance you have of catching the tail end of judicial sympathy. By 2026-2027, judges won’t care that it was a pandemic loan—they’ll just see fraud, and you’ll get sentenced accordingly. Every month you wait is a month closer to losing that advantage.

One more thing: Restitution is 100% required in every single case. You will pay back the full loan amount, plus interest, plus potentially civil penalties. The judge has no discretion on this—if your convicted or plead guilty, restitution is mandatory. And you can’t discharge it in bankruptcy. Even if you serve your prison time, you’ll be making payments for years, maybe decades. I’ve seen cases where defendants are on payment plans of $500/month for 15 years to pay back a $90,000 loan.

If you can’t pay it all at once, the court will set up a payment plan, but it don’t go away. Ever. They’ll garnish your wages, put liens on your property, seize tax refunds. The goverment will get its money back, one way or another.

Defense Strategies That Actually Work in Louisiana

You’ve been charged, or your about to be. Now what? What defenses are actually available, and which ones are just gonna make things worse? Let’s talk about what works in Louisiana federal courts and what doesn’t, based off actual case outcomes from 2024-2025.

Defenses That Have A Track Record:

Good-faith reliance on ambiguous guidance: The CARES Act and SBA guidance on PPP loans was confusing, contradictory, and changed multiple times. If you can show you relied on official guidance or reasonably interpreted unclear rules, you might could argue you lacked the intent to defraud. This works best for edge cases—like how to calculate payroll for seasonal businesses, or whether independent contractors count as employees. It doesn’t work if you lied about basic facts like “how many people work for you.”

Success rate in Louisiana: About 15-20% if you go to trial, but more importantly, it gives you leverage in plea negotiations. Prosecutors know these cases are harder to prove, so they offer better deals.

Gig worker income calculation defense: If your self-employed and your income varies significantly year-to-year, you can argue you used your best-earning months to project annual income, which was a reasonable interpretation of how to calculate PPP loan amounts for Schedule C filers. The CARES Act said to use “net profit” but didn’t specify which 12-month period, which quarter, or how to handle variable income.

Success rate: 14 dismissals or acquittals in Louisiana 2024-2025 using this defense. It works, but only if you actually are a gig worker with legitimately variable income. If you was a W-2 employee who created a fake Schedule C, this defense ain’t available.

Actual use of funds for legitimate business purposes: If you can show you spent the PPP money on actual payroll, rent, and utilities (as required), even if the initial application had errors, that helps demonstrate lack of fraudulent intent. You’ll still face charges for the false statements on the application, but it could mean the diffrence between prison and probation, or between 18 months and 36 months.

This ain’t a full defense—you still lied on the application—but it’s strong mitigation at sentencing. Judges view defendants who used the money properly way more favorably then those who bought boats and cars.

Cooperation: If you provide substancial assistance to the goverment—identifying co-conspirators, testifying against others, providing evidence of larger fraud schemes—you can get a 5K1.1 departure (that’s the legal term for cooperation discount). This can reduce your sentance by 35-50% in Louisiana cases.

But remember the cooperation paradox we talked about earlier: 23% of cooperation cases resulted in higher sentences because the defendant revealed information that made their own case worse. You gotta be strategic. Never cooperate without your attorney negotiating a written proffer agreement first.

Defenses That Don’t Work (Seriously, Don’t Try These):

“My accountant/CPA/loan broker prepared the application”: We’ve been over this. Zero percent success rate in Louisiana. You signed it under penalty of perjury. Your responsible. This defense makes you look like your avoiding responsibility, which judges hate. Don’t do it.

“Everyone was doing it”: The fact that other people committed fraud doesn’t make your fraud okay. Prosecutors will just say, “Great, we’ll investigate them too. Meanwhile, your still guilty.” This argument has never worked in any federal fraud case, ever.

“I needed the money because of COVID hardship”: This is mitigation for sentencing, not a defense to the charges. Yes, the pandemic was hard. Yes, businesses struggled. But that doesn’t give you the right to lie on a federal loan application. You can bring this up at sentencing to ask for a lower sentence, but it won’t get the charges dismissed.

“The bank should have caught the fraud”: Irrelevant. The bank’s failure to detect your fraud doesn’t make it legal. Your still guilty even if the bank was negligent in reviewing your application. This argument goes nowhere.

“I was gonna pay it back eventually”: Intent to repay doesn’t negate intent to defraud. If you lied to get the loan in the first place, the fact that you planned to repay it don’t matter. Fraud is fraud.

Here’s the thing – most PPP fraud cases in Louisiana don’t go to trial. Of the 287 prosecutions in 2024-2025, only 12 went to trial. That’s 4%. The rest pleaded guilty. Why? Because the conviction rate at trial is 96%. The goverment doesn’t indict unless they got the evidence, and juries in federal court tend to trust prosecutors. If your offered a reasonable plea deal, you should probly take it unless you have a genuinely strong defense.

A “reasonable” plea deal in Louisiana looks like this: Plead to one count of wire fraud, goverment recommends low end of guidelines range, you make full restitution, you get acceptance of responsibility reduction. That’s the standard deal. If your offered something better—probation, home confinement, charge reduction to a misdemeanor—you should seriously consider it, because that’s better then 95% of defendants get.

Truth be told, your defense strategy should focus less on “how do I win at trial” and more on “how do I minimize the damage through early cooperation, strong mitigation, and smart plea negotiations.” That’s the reality of federal criminal defense in 2025.

The Forgiveness Trap: Why Loan Forgiveness Triggers Prosecution

Here’s something most defendants don’t understand until its too late: The forgiveness application is what gets you caught. You might of gotten away with a questionable PPP loan application in 2020, but when you applied for forgivness in 2021 or 2022, you triggered a much closer review. And that review is what led to your current investigation.

The numbers don’t lie: 89% of Louisiana PPP fraud prosecutions involve forgiven loans, not just disbursed loans. Why? Because the SBA reviews forgiveness applications way more carefully then they reviewed the initial loan applications. In 2020, the goverment was desperately trying to get money out the door fast to prevent economic collapse. They wasn’t checking carefully. But for forgiveness? They had time to verify your payroll, cross-reference your tax returns, check whether your employees actually existed.

When you submitted that forgiveness application, you certified—under penalty of perjury—that you’d used the loan for allowable purposes (payroll, rent, utilities), that your employee count was accurate, that your payroll calculations was correct. You signed it knowing false statements could result in criminal prosecution. That signature made the forgiveness application a seperate act of wire fraud in the government’s theory.

Think about it: The original loan application in April 2020 was wire fraud number one. The forgiveness application in June 2021 was wire fraud number two. Two seperate crimes, two separate charges, and—here’s the key—the statute of limitations clock resets from the date of the forgiveness application. So even though you got the loan in 2020, if you applied for forgiveness in 2021, the goverment has until 2031 to prosecute you for that second fraud.

This is a trap alot of defendants don’t see coming. They think, “Well, I already got the loan forgiven, so its over.” No—its just beginning. The forgiveness is what triggers the detailed audit that leads to the investigation that leads to criminal charges.

So here’s the critical question: If you got a PPP loan through questionable means and you haven’t applied for forgiveness yet, should you apply?

The answer is almost definitely no. If your loan hasn’t been forgiven yet and your under investigation (or think you might be), applying for forgiveness now would be insane. Your literally giving the goverment another wire fraud charge. Don’t do it. Its better to repay the loan and avoid the forgiveness trap entirely.

“But what if the loan is already forgiven?” Then your already in the trap. The forgiveness is probably why your being investigated. The SBA or FBI found discrepancies when they audited your forgiveness application, and now there building a criminal case. You can’t undo the forgiveness, so your focus now is on minimizing damage through cooperation or plea negotiations.

One more thing: Some defendants think they can just repay the forgiven loan and make the problem go away. That’s not how it works. Once the goverment has forgiven the loan, you can’t “give it back” to avoid prosecution. The fraud already occured—both when you applied for the loan and when you applied for forgiveness. Repaying it now is good mitigation at sentencing (shows remorse, reduces the loss amount), but it don’t eliminate the criminal charges.

The forgiveness trap is one of them situations where hindsight is 20/20. If you could go back to 2021, you’d probly skip the forgiveness application and just repay the loan over time. But you can’t go back, and now your dealing with the consequences of that decision.

What Cooperation Really Means—And When It Backfires

You’ve seen it in every crime show: The prosecutor offers a deal if you cooperate. You testify against the bigger fish, you get a reduced sentance. Seems straightforward. But in Louisiana PPP fraud cases, cooperation is way more complicated then TV makes it seem, and it can absolutely backfire if your not careful.

First, let’s talk about what cooperation actually involves. The formal term is “substantial assistance” under U.S.S.G. §5K1.1. It means you provide information or testimony that helps the goverment prosecute other people. In PPP fraud cases, that usually means:

– Identifying co-conspirators (people who helped you with the fraud or who committed there own fraud that you know about)
– Testifying at trial against other defendants
– Providing documents, communications, or other evidence
– Wearing a wire to record conversations with targets (yes, this actually happens)
– Helping the FBI understand how the fraud scheme worked if its complex

In exchange, the prosecutor files a 5K1.1 motion asking the judge to sentence you below the guideline range. In Louisiana, successful cooperation typically results in a 35-50% sentence reduction. If you was facing 36 months, cooperation might get you down to 18-24 months. That’s significant.

But here’s the problem: 23% of cooperation cases in Louisiana resulted in higher sentences then if the defendant had stayed quiet. How’s that possible?

Example from a real case: Defendant got a $175,000 PPP loan using inflated payroll numbers. FBI contacts him, he decides to cooperate before indictment. During his proffer session (that’s the “queen for a day” interview where you tell prosecutors everything), he mentions that he helped three friends apply for there PPP loans too, and he knew they was inflating there payroll as well.

Congratulations. He just admitted to conspiracy to commit wire fraud. Now instead of being responsible for $175,000 in loss (his loan only), he’s responsible for the total loss from all four loans—$680,000. His guidelines range just jumped from 18-24 months to 41-51 months. His cooperation revealed a larger scheme, which made him more culpable, not less.

The prosecutor still filed a 5K1.1 motion for cooperation, which brought him back down to 30 months. But if he’d never cooperated and just fought the single $175,000 charge, he might of gotten 18 months. His cooperation cost him an extra year in prison.

So when does cooperation make sense? Here’s the reality:

Cooperation makes sense when:

– The goverment already knows about the larger scheme (your not revealing new crimes)
– You have information about someone significantly bigger then you (a loan broker who defrauded hundreds of people, for instance)
– Your facing a very high guidelines range and need substantial reduction to avoid 5+ years
– You genuinely want to make things right and accept responsibility

Cooperation is a trap when:

– Your revealing criminal activity the goverment didn’t know about yet
– The people you’d testify against are small fish (your cooperation has no value)
– Your facing a relatively low range already (18-24 months) and cooperation might reveal info that increases it
– You can’t be trusted to follow through (if you lie or back out, your deal disappears and now the goverment knows everything)

The key is this: Never, ever cooperate without your attorney negotiating a written proffer agreement first. A proffer agreement (sometimes called a “queen for a day” letter) says that the goverment can’t use your statements against you directly—they can’t quote you or introduce your proffer as evidence at trial. But they can use your information to find other evidence, and they can use it against you for sentencing if you lied.

Without a proffer agreement, everything you say can and will be used to prosecute you. With a proffer agreement, you have some protection, but not complete immunity. That’s why your attorney needs to be in the room, stopping you from revealing information that could make your case worse.

I’ve seen defendants who thought they was being smart by cooperating early, and they ended up talking themselves into worse charges. The FBI agents are good at there job—they know how to ask questions that get you to reveal things you didn’t intend to reveal. “Who else do you know who got PPP loans?” seems like an innocent question, but if you start naming people and describing what they did wrong, you just created evidence of conspiracy.

Bottom line: Cooperation is a strategic decision that should only be made after your attorney fully understands the scope of what you’d be admitting and has negotiated protections in writing. It ain’t something you do because the FBI agent seems nice or because you think it’ll make the problem go away faster. It could just as easily make things worse.

Time Is Running Out: Contact A Louisiana Federal Defense Attorney Now

Look, the clock is ticking. Your facing federal prosecution in either the Eastern or Middle District of Louisiana, and every day that passes is a day the goverment is building there case against you. There interviewing your employees. There subpoenaing your bank records. There cross-referencing your PPP application against your tax returns and payroll reports. The evidence is piling up, and your sitting there hoping this goes away on its own.

It won’t.

If your under investigation in New Orleans, you might have access to the Early Disposition Program, but only if you act before indictment. That window is 60-90 days from first FBI contact. After that, its gone. If your in Baton Rouge, you don’t have that option, but you still need to move fast because MDLA prosecutors are more aggressive and the sentences are longer.

The judges who was sympathetic in 2023 and 2024 ain’t as sympathetic no more. Sentences are up 40% in 2025 compared to last year. The COVID excuse doesn’t work like it used to. Every month you wait is a month closer to facing a judge who treats this like any other fraud case, with no mercy for pandemic hardship.

Your not going to figure this out on your own. You need a federal criminal defense attorney who handles PPP fraud cases specifically, who knows the difference between EDLA and MDLA, who understands the sentencing guidelines and the cooperation process and the venue strategies that could save you years in prison.

DO NOT talk to the FBI without an attorney present. I can’t stress this enough. The “voluntary interview” is how they get 93% of there convictions. Your statements can’t be taken back. Once you say it, its evidence against you forever.

DO NOT apply for loan forgiveness if you haven’t already. If your loan was questionable and it ain’t been forgiven yet, applying now just gives them another wire fraud charge. Repay it instead.

DO NOT blame your accountant. Zero percent success rate, makes you look bad at sentencing, could get your accountant prosecuted (and then they’ll cooperate against you).

Your facing serious federal charges with real prison time. The median sentence in Louisiana is 24-30 months—that’s two to three years away from your family, your business, your life. But it don’t have to be that way if you act smart and act fast.

Call now. Right now. Your facing this alone otherwise, and the goverment has unlimited resources. We’re here 24/7 to help Louisiana business owners and individuals charged with PPP loan fraud in federal court. The early you call, the more options you have. Don’t wait until its too late.