Criminal Defense Lawyers

If your reading this, its because a prosecutor offered you a plea deal in your PPP fraud case and you don’t know if its good or terrible. You need to make a decision, and your terrified of what they call the “trial penalty”—the difference between 18 months if you plead guilty versus 5 years if you loose at trial. This article will show you what prosecutors don’t want you too know about negotiating plea deals in PPP fraud cases.

The Trial Penalty Is Real But Negotiable

Look, heres the deal. The “trial penalty” in PPP fraud cases is very real, but its also the prosecutors biggest weapon to make you fold fast. And irregardless of what they tell you, its not set in stone.

The median plea sentance for PPP fraud in 2024-2025 is around 18 to 24 months. The median trial sentance if you loose? 60 to 72 months. Thats 2-4 times longer. The difference between watching you’re kids grow up and missing five years of they’re lives.

But here’s what prosecutors don’t tell you: not every case has that kind of penalty. The trial penalty depends on how strong there case actually is. If they have slam-dunk evidence—video of you filling out fake applications, emails where you admitted you lied, multiple witnesses—then yeah, the trial penalty is going to be savage. But if there case is based on gray area stuff, like whether you actually qualified for the loan or whether you had criminal intent, then the trial penalty is more of a bluff then a promise.

Why do prosecutors use this tactic? Simple. Going to trial costs them $200,000 to $500,000 in resources. They got to prepare witnesses, deal with discovery, dedicate an AUSA to your case for months. And in 2025, DOJ is stretched thin. Their prosecuting thousands of PPP cases and the statute of limitations for wire fraud is running out on 2020 loans. Every case that goes to trial is a case that can’t be plead out quick. Your lawyer should be using this leverage.

Plus—and this is something alot of defense attorneys don’t mention—prosecutors have been loosing PPP trials they thought was slam dunks. Juries are sympathetic to people who took out loans during COVID, especially if you can show you relied on unclear guidance or bad advice from an accountant. Derek Greene in Florida, Tamara Dadyan in California—both got acquitted. Prosecutors know that if they loose at trial, they get nothing. No conviction, no restitution, no deterrent affect.

So when should you fold and when should you fight? Here’s the calculus. If the trial penalty is less then 50% (like 24 months plea versus 36 months trial), and you got a legitimate defense, you might wanna consider fighting. If the trial penalty is over 200% (18 months plea versus 60 months trial) and you got weak evidence on you’re side, you probly should take the plea.

But if your in that gray area—if you have partial defenses, unclear intent, reliance on professional advice—than you got major negotiating leverage. Signal to the prosecutor that your willing to go to trial (even if you won’t) and watch how fast they start offering better terms.

The Hidden Leverage Points Prosecutors Pray You Don’t Know About

Irregardless of what you’ve been told, you have more cards to play then you think. Prosecutors operate based off internal metrics, deadlines, and bureaucratic pressures that create leverage points most defendants never exploit. Here’s the ones that matter most in 2025.

The $150,000 Magic Number

This is huge. DOJ has internal guidelines that seperate cases into priority levels. If you’re PPP fraud case involves a loss amount under $150,000, your case is classified as “low priority” and gets assigned to a junior AUSA with a massive caseload. If its over $150,000, you get a senior prosecutor who treats it like a career-maker. This threshold isn’t about the crime—its about prosecutorial economics.

Here’s the thing: the “loss amount” for sentencing purposes is negotiable. Its not automatically the loan amount you recieved. Under the federal sentencing guidelines, loss equals actual loss to the victim. If you got a $200,000 PPP loan but you spent $50,000 on legitimate payroll expenses, than the actual loss is $150,000. And if you’re lawyer fights hard, that could be negotiated down to $149,000.

The difference? Getting under that $150,000 threshold dramatically increases you’re chances of avoiding prison time. In 2024, 70% of defendants with loss amounts under $150,000 got probation or home confinement. For cases over $150,000? Only 15% avoided prison.

Why does this matter? Because in the federal sentencing guidelines, loss amount determines you’re Base Offense Level. A $149,000 loss puts you at Base Offense Level 14. A $150,000 loss puts you at Level 16. Those two levels translate to 18 to 24 months difference in you’re sentencing range. Fight like hell to get under that threshold.

The Statute of Limitations Leverage Play

If you took out a PPP loan in 2020, the clock is ticking for prosecutors. Wire fraud—the most common charge in PPP cases—has a five-year statute of limitations. That means if you got you’re loan in April 2020, prosecutors have until April 2025 to file charges. If your reading this in late 2024 or 2025 and you haven’t been indicted yet, you have massive leverage.

Prosecutors are desperate to close cases before the statute runs. Their facing thousands of PPP cases and limited time. Every week you delay in plea negotiations is a week they loose. This leverage works best if your case is under $150,000 and your approaching the limitations deadline.

You’re lawyer should be slow-walking the negotiation—asking for more time to review discovery, requesting extensions, dragging out every procedural step. Make the prosecutor sweat. As the deadline approaches, they’ll either drop charges (because they can’t make the deadline) or offer increasingly better plea deals (because they’d rather get something then nothing).

But here’s the catch: this only works if you haven’t been indicted yet. Once they file formal charges, the statute of limitations is tolled. So if you got a target letter but no indictment, you got leverage. If your already indicted, this tactic won’t help you.

Jurisdictional Arbitrage

Where you’re prosecuted matters more then what your charged with.

Let me explain. If you operated you’re business in multiple states, or if you’re PPP loan was processed through banks in different states, prosecutors might have venue options. The Southern District of New York (Manhattan) is known for harsh sentences in white-collar cases. The Northern District of Texas is much more lenient. Same crime, same facts, different zip code—completely different sentence.

I’ve seen cases where a defendant faced 48 months in SDNY, but there lawyer negotiated a transfer to a Texas district for the same plea agreement, and the defendant got 12 months home confinement. Same conduct. Different venue. This isn’t something prosecutors advertise, but if you got multi-state operations, wire transfers that crossed state lines, or business activity in multiple jurisdictions, your lawyer should be negotiating which district prosecutes you before formal charges are filed. Once your indicted, its alot harder to transfer venue.

Information vs. Indictment Timing

This is one of the most important leverage points, and most defendants don’t even know it exists. Theres two ways prosecutors can charge you: by “Information” or by “Indictment.” If a prosecutor calls you’re lawyer and says they’ll charge you by Information if you plead guilty by a certain deadline, that means their begging you to plead fast. Heres why.

Charging by Information means they skip the grand jury process. This saves them time and resources. But it also means their offering you a deal before formal charges are even filed. This is maximum leverage time. If a prosecutor is offering to charge by Information, it means their under pressure—either from caseload, statute of limitations, or weak evidence.

You should negotiate hard here. Don’t rush. They need you more then you need them at this moment. Typical offers at this stage: plead to one count (instead of multiple), reduced loss calculations, sentencing recommendations at the low end of the guidelines.

On the other hand, if your indicted by a grand jury first, your in a much weaker negotiating position. An indictment means the prosecutor already invested significant resources and their committed to prosecuting. At that point, plea offers are less generous—you’ll probly have to plead to most of the charges, and sentencing concessions are minor. The lesson? If a prosecutor offers an Information deal with a tight deadline, don’t rush. Slow down. Negotiate. They wouldn’t be offering this if they had a slam-dunk case.

What You Should Actually Negotiate For (And What You Should Give Up)

So you’ve decided to negotiate a plea. What should you actually be fighting for? And what should you let go of?

Not all plea terms are created equal, and understanding the difference between what matters and what doesn’t can literally save you years in prison.

Charge Bargaining—The Big One

Charge bargaining is the most common type of plea deal, and its the one you should focus on first. Heres how it works: the prosecutor charges you with multiple crimes—lets say wire fraud, bank fraud, and conspiracy. In a charge bargain, you plead guilty to one count of wire fraud, and they drop the other charges.

Why does this matter? Because in federal sentencing, every count you plead guilty to adds to you’re offense level, which increases you’re sentencing range. Pleading to one count instead of three can reduce you’re sentence by years.

Never—and I mean never—plead guilty to all the charges they initially file. Prosecutors overcharge as a negotiating tactic. Their expecting you to plead to fewer counts. If they charge you with five counts, you should be negotiating to plead to one or two at most. The rest should be dismissed as part of the plea.

Sentence Bargaining—The Guidelines Game

Even if you plead guilty, theres still negotiation around what sentance you’ll actually get. Federal sentences are calculated using the sentencing guidelines, which assign an “offense level” based on the crime and then calculate a sentencing range. Heres what you should be negotiating:

Acceptance of Responsibility: If you plead guilty and accept responsibility for you’re conduct, you get a three-level reduction in offense level. This is basically automatic if you plead, but make sure its in writing in the plea agreement.

Criminal History Category: If you have prior convictions, they increase you’re criminal history score, which increases you’re sentence. But sometimes prior convictions can be excluded or downgraded. You’re lawyer should be fighting this.

Specific Offense Characteristics: Things like “sophisticated means,” “use of interstate commerce,” “more then 10 victims”—these are enhancements that add levels to you’re offense. You’re lawyer should be negotiating to remove as many of these as possible.

Every offense level equals about three to six months in you’re sentencing range. So fighting over these details isn’t academic—its the difference between 18 months and 36 months.

Restitution—Fight the Terms, Not Just the Amount

Heres something most defendants get wrong: they spend all there energy negotiating the restitution amount and ignore the payment terms. Big mistake.

Restitution is the money you have to pay back to the government (or the victim bank). In PPP cases, this is usually close to the loan amount. If you got a $200,000 loan, your probly looking at $180,000 to $200,000 in restitution.

Everyone tries to negotiate that number down. “I only got $150,000 after fees.” “I spent $50,000 on legitimate expenses.” Sure, try to reduce the amount. But the real negotiating opportunity is the payment terms. Heres why: restitution survives bankruptcy, but if its structured right, it doesn’t accrue interest. A $200,000 restitution order due in six months will bankrupt you. But a $200,000 restitution order paid over 30 years at $555 per month? Thats manageable.

Most prosecutors don’t care about the payment schedule—they just want the conviction. So negotiate long payment terms with small monthly amounts. Some defendants have even negotiated suspended restitution until after there released from prison (you can’t pay from prison anyway). This delays the financial pain by two to five years, and sometimes the government forgets to enforce collection.

Another tactic: offer a lump sum payment now at a discount. “I’ll pay $80,000 cash today instead of $200,000 over time.” The government might take it because the present value of $80,000 now is worth more then $200,000 they’ll never collect.

What to Give Up

Some plea terms are standard and not worth fighting over. You’re probly going to have to waive you’re appeal rights—thats in almost every federal plea agreement. The prosecutor will also want you to agree to a sentencing range or at least not argue for a sentence below the guidelines. Thats pretty standard too.

Cooperation is tricky. If the prosecutor asks you to cooperate against others (we’ll talk about this more in the next section), only agree if you get written guarantees of what you’ll get in return. Don’t cooperate on a hope and a prayer.

What to Never Give Up

Theres a few things you should fight to preserve, even in a plea deal. First, if you have a strong legal issue (like an illegal search or coerced confession), you might be able to negotiate a conditional plea under Federal Rule 11(a)(2). This lets you plead guilty but preserve you’re right to appeal that specific issue. If you win the appeal, you’re conviction gets vacated. If you loose, the plea stands. Its rare, but powerful.

Second, don’t give up you’re right to object to the Pre-Sentencing Report (PSR). The PSR is written by a probation officer after you plead but before sentencing, and it recommends a sentence to the judge. You can object to the loss calculation, criminal history, and enhancements in the PSR. This is a second bite at the apple, and most defendants don’t fight it (huge mistake).

The Cooperation Trap and Other Ways Prosecutors Will Screw You

Alright, this is the section your probly dreading.

Should you cooperate against you’re business partner, you’re accountant, you’re co-conspirators? Should you give up names to save yourself? This is the moral crisis that keeps you up at night, and prosecutors know it. Their counting on you to fold under the pressure. But before you make that decision, you need to understand how cooperation actually works—and how it can screw you.

What Cooperation Actually Means

Heres what prosecutors don’t make clear when they dangle cooperation in front of you: you plead guilty first. Then you cooperate. Then—maybe—the prosecutor files a motion for a sentence reduction. Notice the order. You give up you’re Fifth Amendment rights, you admit guilt, you testify against others, and then, at the end of it all, the prosecutor might ask the judge to reduce you’re sentence. But they don’t have to. Theres no guarantee.

Cooperation agreements usually say the prosecutor will file a substantial assistance motion under USSG §5K1.1 if they determine you’re cooperation was “substantial.” But who decides if its substantial? The prosecutor. And they can change there mind.

I’ve seen defendants cooperate fully—give up everything—and the prosecutor still refuses to file the motion because they decided the info wasn’t valuable enough. Now your stuck with a guilty plea, no trial rights, and no sentence reduction. Plus everyone knows you cooperated, so you’ve burned every bridge.

The Cooperators Dilemma

Lets say the prosecutor offers you a deal: give us you’re business partners name, tell us how the scheme worked, testify at there trial, and we’ll cut you’re sentence by 30 to 40 percent. Sounds good, right?

But heres what their not telling you.

First, the person your cooperating against is probably someone you know—maybe even someone you care about. You’re accountant who filed the PPP application for you. You’re business partner who you’ve worked with for ten years. Maybe even a family member. The prosecutor is asking you to destroy them to save yourself. Can you live with that?

Second, the information you provide might not even be useful. In most PPP cases, prosecutors already know who the co-conspirators are. Their looking for you to confirm what they already have or provide minor details. If you’re info isn’t unique or valuable, the prosecutor won’t give you credit. But you’ve already plead guilty and cooperated, so you’ve got no leverage left.

Third—and this is important—cooperation doesn’t reduce you’re sentence by as much as you think. A 30 to 40 percent reduction sounds great until you realize that means going from 36 months to 24 months. Thats a year. Is it worth betraying someone you know for a year? Compare that to hard negotiation on the front end—fighting the loss calculation, getting charges dropped, negotiating better terms—which can reduce you’re sentence by 20 to 30 percent without cooperating. The math often doesn’t favor cooperation.

When Cooperation Makes Sense

I’m not saying never cooperate. Theres scenarios where it makes sense. If your facing 10+ years and cooperation is the only way to avoid dying in prison, than yeah, you gotta consider it. If the person your cooperating against is genuinely violent or predatory (not just another desperate business owner), than maybe the moral calculus is different. And if you have truly unique information that prosecutors don’t have—like knowledge of a bigger fraud scheme their unaware of—than you’re cooperation might actually be valuable, and they’ll give you real credit for it.

But heres the key: get it in writing. Don’t cooperate on a promise. Make sure the plea agreement specifies exactly what sentence reduction you’ll get if you cooperate fully. Most cooperation agreements are vague: “The government may file a motion for downward departure if cooperation is substantial.” Thats garbage. Demand specific terms: “Defendant will receive a four-level reduction if defendant provides truthful testimony at co-defendants trial.” If the prosecutor won’t put it in writing, your cooperation isn’t worth much to them.

When Cooperation Is a Trap

Cooperation is a trap if prosecutors already have all the information you can provide. In PPP cases, the DOJ has been investigating these schemes for years. They’ve got bank records, applications, emails, co-conspirator testimony. You’re info is probly not new. Their using you to confirm what they already know, which means you won’t get substantial assistance credit.

Its also a trap if the person your cooperating against is family or a close friend. The emotional and relational cost of betrayal is real. You’ll have to live with that decision for the rest of you’re life. Is saving a year or two in prison worth destroying a relationship? Only you can answer that, but don’t let the prosecutor pressure you into a decision you’ll regret.

The Better Strategy: Negotiate Hard Without Cooperation

Heres what alot of defense attorneys won’t tell you: you can often get 20 to 30 percent sentence reductions through aggressive plea negotiation without cooperating. Fight the loss calculation. Get charges dropped. Negotiate offense level reductions. Push for diversion programs (more on this in the next section). Demand better restitution terms.

All of these strategies are guaranteed—your not relying on the prosecutors goodwill after you’ve already plead guilty.

At the end of the day, cooperation is a gamble. You give up everything—you’re Fifth Amendment rights, you’re relationships, you’re dignity—and hope the prosecutor keeps there promise. But they don’t have to. Hard negotiation on the front end is a better bet. You keep you’re integrity, you keep you’re relationships, and you sleep at night knowing you didn’t rat out someone to save yourself.

The Nuclear Options and Escape Hatches

So what if the plea offer on the table is terrible? What if the prosecutor isn’t budging? Are their any alternatives to just pleading guilty to whatever they want?

Yes. Their are a few “nuclear options” and escape hatches that most defense attorneys don’t pursue aggressively enough. These won’t work in every case, but if you qualify, they can be game-changers.

Diversion Programs for First-Time Offenders

If you have zero criminal record, you’re PPP fraud case involves less then $150,000, and you’ve paid back at least some of the money, you might qualify for a pretrial diversion program or a deferred prosecution agreement. These programs are rare in federal court, but their available—and almost no defense attorneys ask for them.

Heres how it works: instead of pleading guilty, you enter into an agreement where you complete probation, pay restitution, and stay out of trouble for a set period (usually 12 to 24 months). If you successfully complete the program, the charges are dismissed. No conviction. No felony record. No prison time. Its like the case never happened.

Why don’t more defendants get diversion? Because prosecutors don’t offer it—you have to demand it. And most defense attorneys don’t push for it because their focused on negotiating a plea, not avoiding a conviction altogether. But in 2024, about 5 percent of PPP fraud defendants got diversion, even though an estimated 30 percent were eligible. The difference? Those 5 percent had lawyers who demanded it.

If your a first-time offender with a sympathetic story (COVID destroyed you’re business, you relied on bad advice from an accountant, you’ve paid money back), diversion should be on the table. You’re lawyer should be saying to the prosecutor: “We go to trial, or you give us diversion. Pick one.” Prosecutors hate trials, and if you’re case is marginal, they might agree to diversion just to close the case.

Conditional Pleas: Preserving You’re Appeal Rights

Almost every plea agreement includes a waiver of appeal rights. You agree not to appeal you’re conviction or sentence. But theres an exception under Federal Rule of Criminal Procedure 11(a)(2): conditional pleas. A conditional plea lets you plead guilty while preserving you’re right to appeal a specific legal issue.

Heres an example: lets say the FBI searched you’re business without a warrant, and all the evidence against you came from that search. You think the search was illegal, but you don’t want to risk going to trial. With a conditional plea, you plead guilty and get the benefits of the plea deal (reduced charges, lower sentence), but you reserve the right to appeal the search issue. If the appellate court agrees the search was illegal, you’re conviction is vacated. If the court says the search was legal, the plea stands and you serve you’re sentence.

This is a powerful tool, but prosecutors hate it. Why? Because it lets you hedge you’re bets. You get the plea discount, but they don’t get the finality of a conviction. You’ll need strong leverage to get a prosecutor to agree to a conditional plea—usually a combination of a strong legal issue (Fourth Amendment violation, coerced confession, vindictive prosecution) and credible threat to go to trial.

Conditional pleas are rare—only about 2 to 3 percent of federal pleas include them. But if you have a strong constitutional issue, its worth fighting for. You get the plea deals reduced sentence as insurance, and you also get a lottery ticket: if you win the appeal, the conviction disappears.

Slow-Walking the Process

Sometimes the best strategy is just to delay. If your case involves a 2020 PPP loan and the statute of limitations is running out in 2025, every month you delay is another month of pressure on the prosecutor. Ask for continuances. Request more time to review discovery. Claim you need a medical evaluation. Every procedural delay eats up the prosecutors time and makes them more desperate to close the case.

This tactic works best for sub-$150,000 cases where the prosecutor is already stretched thin. As the statute of limitations deadline approaches, they’ll either drop charges (because they can’t make the deadline) or offer increasingly generous plea deals (because they’d rather get something then nothing).

The Pre-Sentencing Report Fight

Even after you plead guilty, the game isn’t over. Before sentencing, a probation officer writes a Pre-Sentencing Investigation Report (PSR) that recommends a sentence to the judge. The PSR calculates you’re offense level, criminal history, loss amount, and any enhancements. And heres the thing: you can object to the PSR.

Most defendants just accept whatever the PSR says. Huge mistake.

This is a second chance to fight the loss calculation, challenge enhancements, and reduce you’re offense level. The probation officer is more neutral then the prosecutor—their job is to be accurate, not to maximize you’re sentence. If you can show that the loss amount was overstated, or that certain enhancements don’t apply, the probation officer will often side with you.

I’ve seen cases where the plea agreement said the loss was $180,000, but during the PSR process, the defendant provided documentation showing $40,000 was spent on legitimate expenses. The probation officer revised the loss to $140,000, dropping it below that critical $150,000 threshold. That two-level reduction translated to 18 months less prison time, even though the plea was already signed.

Don’t sleep on the PSR. Its you’re last chance to reduce you’re sentence without the prosecutors direct involvement. Fight it like you’re life depends on it—because it kinda does.

Final Thoughts

You now know what prosecutors don’t want you too know. The plea deal on the table might be negotiable—or it might be garbage. Every day you wait without acting on these leverage points is a day you loose negotiating power.

Don’t sign anything without exploring the $150,000 threshold, the statute of limitations pressure, venue options, and diversion programs. Get a lawyer who actually knows these tactics (most don’t). You’re life is on the line. Negotiate like it.