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NJ EIDL Loan Fraud Lawyers
You got a letter from the SBA Office of Inspector General. Or an FBI agent called about your EIDL loan. You’re in New Jersey, you’re terrified, and you don’t know what happens next. The government has resources, investigators, prosecutors – and you’re facing prison. Here’s what actually happens in your situation, the timeline you’re facing, and what people in your exact position experience.
Thanks for visiting Spodek Law Group. We’re a second-generation law firm managed by Todd Spodek with over 50 years of combined experience. We defend federal fraud cases throughout New Jersey and nationwide – including high-profile cases like Anna Delvey, whose case generated a Netflix series. This article explains what happens to YOU, what choices YOU have, and what outcomes YOU can expect.
You Got Contacted – What That Means
Someone from the “SBA Office of Inspector General” sent you a letter, or an FBI agent called about your EIDL loan. You don’t know who these people are or what this means.
The SBA Office of Inspector General (OIG) investigates loan fraud. When SBA’s systems flag your application, they refer it to OIG. According to a 2025 GAO report, SBA submitted nearly 3 million fraud referrals – but 2 million weren’t actionable due to insufficient data. That’s a 67% failure rate, yet investigations continue. If the FBI contacts you, DOJ has taken over. In New Jersey, the COVID-19 Fraud Enforcement Strike Force handles these prosecutions aggressively.
Here’s your first critical decision: talk to them now or hire a lawyer first. Most people think, “I’ll just explain what happened.” That’s a mistake. In the August 2024 Sparta, NJ case, Diana Valteri and Edmond Haxhillari talked to investigators without counsel. Their statements became evidence. They pleaded guilty to wire fraud and money laundering – likely facing 2 to 4 years in prison for $790,000 in fraudulent EIDL loans. When federal agents contact you, anything you say becomes evidence. They’re building a case to indict you. Your right to counsel exists for this moment. A lawyer negotiates cooperation scope, protects your Fifth Amendment privilege, and may resolve the matter before charges are filed.
The Timeline
You want to know how long this takes and what comes next.
Months 0-6: SBA Flags Your Application – You don’t know it’s happening. SBA’s systems flag applications for shell companies, personal fund use, inflated payroll. They refer to OIG. Months 6-18: OIG Investigation – This is when you find out. OIG requests bank records, interviews employees, shows up at your business. They’re proving you KNEW statements were false. If they believe they have a case, they refer to DOJ. But 2 million of 3 million OIG referrals couldn’t be investigated – many cases rest on weak foundations. Months 18-30+: Prosecution Decision – DOJ decides whether to charge you. If they indict, you’re arraigned. Discovery follows, plea negotiations begin. From charges to sentencing takes 12-24 months. Total timeline: 2.5 to 4 years from first contact to resolution. The Sparta case illustrates this – investigation 2022-2023, charges 2024, guilty plea August 2024, sentencing January 2025.
Statute of limitations: 5 years for false statements, 10 years for wire fraud. If they haven’t charged you within those timeframes, they can’t.
Your Choices
Talk Without Counsel vs. Lawyer Up – If you talk without a lawyer, anything you say becomes evidence. You think you’re explaining a mistake; they’re documenting admissions. “I was confused about allowed expenses” becomes “Subject admitted uncertainty but proceeded anyway” – that’s consciousness of wrongdoing. A lawyer controls what information you provide and when.
Proactive Resolution vs. Wait and See – Once indicted, your plea position weakens. Before charges, there’s flexibility. Your lawyer approaches prosecutors: “My client made errors but didn’t intend to defraud. Here’s evidence of legitimate operations, here’s repayment.” Sometimes prosecutors decline charging if they see lack of criminal intent. This only works before indictment.
Plea Deal vs. Trial – Federal conviction rates exceed 90%. The “trial penalty” is real: trial defendants who lose get sentences 30-50% longer than those who plead guilty. Prosecutors use this explicitly – “Take 24 months or risk 48 at trial.”
What People Actually Get
You read that EIDL fraud carries “30 years and $1 million fine.” Prosecutors cite these to terrify you into pleading. Here’s what people actually get. The Sparta couple fraudulently obtained $790,000 through shell companies. They pleaded guilty in August 2024. Based on sentencing guidelines, they’re looking at 24-48 months. Not 30 years. Likely 2 to 4 years. Another New Jersey business owner fraudulently obtained $3.2 million in PPP loans. He was sentenced to 41 months – three and a half years for over $3 million. That’s actual penalty, not theoretical maximum.
Factors affecting YOUR outcome: amount involved, cooperation level, prior history, ability to repay. Realistic range for first-time offender with moderate fraud ($100K-$1M) and full cooperation: 18-36 months typically, sometimes probation if amount is small and cooperation exceptional.
Here’s what prosecutors won’t tell you: the government created this chaos. SBA distributed $385 billion with minimal oversight – fraud detection wasn’t implemented until mid-2021, after 55% of funds went out. Applications were deliberately simplified for pandemic speed. Guidance was contradictory. Then, years later, government prosecutes borrowers for errors. That’s not justice – that’s entrapment by bureaucracy.
Federal fraud cases aren’t like state charges. You’re dealing with specialized white-collar prosecutors, backed by FBI, IRS investigators, and unlimited resources. They have forensic accountants tracing every dollar, cooperating witnesses, and years to build cases. At Spodek Law Group, we’ve defended federal fraud cases for decades. Todd Spodek is a second-generation criminal defense lawyer who’s handled high-profile federal cases. When Netflix creates a series about your client – like Anna Delvey – you understand that defending unpopular clients when media has convicted them is when constitutional principles matter most.
We’re available 24/7. If FBI contacts you Saturday morning, you need counsel immediately. We work coast-to-coast through our digital portal. We’ve appeared in federal courts throughout the District of New Jersey – Newark, Camden, Trenton. Your next move: don’t talk to investigators without a lawyer. Don’t sign anything. The moment federal agents contact you about your EIDL loan, constitutional rights activate – but only if you invoke them. Call us.