PPP Loan Investigation – Russian Business Owner Rights

PPP Loan Investigation – Russian Business Owner Rights

You took a PPP loan during COVID. Your business needed it to survive. You filled out the paperwork, got the money, used it for payroll, and thought the whole thing was behind you. Maybe you even got loan forgiveness. You moved on with your life.

And then federal agents showed up. Or your bank called with questions. Or you got a letter from the SBA asking for documentation. Whatever form it took, you just found out the government is investigating your PPP loan. And you’re terrified.

If you’re a Russian-American business owner, this fear hits different. You already feel like the government watches you more closely. You already worry about your immigration status, your business relationships, your community reputation. And now federal agents are asking questions about a loan you took four years ago to keep your employees paid.

Your Bank Already Told the Government

OK so heres the first thing you need to understand, and its the thing most people dont realize. The investigation into your PPP loan probly started a long time before anyone contacted you.

Banks file something called Suspicious Activity Reports – SARs. These go directly to FinCEN (the Financial Crimes Enforcement Network), which shares them with the DOJ, FBI, and IRS. If your bank saw anything unusual about your PPP loan – the timing, the amounts, anything that didnt match your normal business patterns – they filed a report.

And heres the kicker. Banks are prohibited from telling you they filed a SAR. Your bank helped you get the loan. They processed your application. They deposited the money in your account. And the whole time, they might have been reporting you to the federal government.

Your bank is not on your side. They never were.

But its not just SARs. The DOJ uses something called grand jury subpoenas to get bank records directly. This happens without any notification to you. Prosecutors can obtain years of your bank statements, wire transfers, deposits, and withdrawals – all before you have any idea your under investigation.

By the time federal agents show up at your door, by the time you get that first letter or phone call, investigators have probly already spent months reviewing your financial records. They know what you deposited. They know what you spent. They know wheather the PPP funds went to payroll or somewhere else.

The “investigation” isnt just starting when they contact you. Its basicly already over. There just giving you a chance to lie about it.

The 10-Year Statute of Limitations Trap

Heres something that shocks most Russian business owners when they learn about it.

You took your PPP loan in 2020 or 2021. Maybe you thought the danger passed. Its been years. The statute of limitations for most federal crimes is 5 years. So your probably safe, right?

Wrong.

In 2022, Congress passed the PPP and Bank Fraud Enforcement Harmonization Act. This law extended the statute of limitations for PPP fraud from 5 years to 10 years. That means a PPP loan you took in April 2020 can be prosecuted until April 2030. A loan from 2021 can be prosecuted until 2031.

The government gave itself a decade to investigate you. And there using it.

Look at whats happening right now. In 2024, the DOJ opened over 1,200 civil pandemic fraud matters. Over 600 qui tam cases – thats whistleblower lawsuits – have been filed under the False Claims Act. The DOJ Criminal Fraud Section has dedicated strike forces working on nothing but COVID relief fraud.

These arent old cases. These are new investigations being opened right now, looking at loans from 2020 and 2021. The government has until 2030 or 2031 to charge you. There in no hurry.

If you thought the danger passed because a few years went by – it didnt. The danger is just starting.

What Investigators Already Know Before They Contact You

Let me be real with you about how these investigations actualy work.

When federal agents show up to talk about your PPP loan, they dont come with questions. They come with answers. They already know what happened. There testing you to see if youll lie about it.

Heres what investigators probly have before they ever contact you:

Your bank records: Every deposit, every withdrawal, every wire transfer, every check. They know exactly were the PPP money went.

Your payroll records: If you used a payroll company, investigators have already subpoenaed those records. They know exactly how many employees you had and what you paid them.

Your tax returns: The IRS is part of the investigation team. They have your 941s (quarterly payroll tax returns), your W-2s, your corporate returns. They can compare what you told the SBA against what you told the IRS.

Your PPP application: Every number you put on that form is now evidence. Employee counts. Payroll costs. Certifications about eligibility. All of it.

Your forgiveness application: If you got loan forgiveness, the government has your forgiveness application too. They can compare it to your actual bank records.

Employee interviews: In many cases, investigators have already talked to your current or former employees. Disgruntled ex-employees are especially helpful to prosecutors.

So when agents show up and start asking questions – “How many employees did you have? What did you use the PPP funds for? Did you understand the requirements?” – there not trying to learn the answers. They already know the answers. There seeing if youll tell them the truth.

The Interview That Destroys Cases

This is were Russian business owners destroy there own cases.

Federal agents show up. There polite. There friendly. They say they just want to “understand” your business. They say this is just “routine.” They say you can “clear this up” if you just explain what happened.

Its a trap.

Everything you say in that interview becomes evidence. If you tell the truth, you might be admitting to crimes. If you lie – even about something minor – you just committed a new federal crime.

18 USC 1001 makes it a federal crime to make false statements to federal investigators. Thats up to 5 years in prison – on top of whatever PPP fraud charges you might face.

And heres the thing. Investigators already have your records. They know the answers. If you say you had 50 employees and your payroll records show 20, thats not just evidence of PPP fraud. Thats lying to federal agents. Thats a seperate charge. Thats additional prison time.

The interview isnt an opportunity to explain yourself. Its an opportunity to make your situation worse.

This is why the most important thing you can do if federal agents want to talk about your PPP loan is this: Say nothing until you have an attorney present.

You have the right to decline an interview. You have the right to have an attorney present. You have the right to remain silent. Exercise those rights. Every single time.

Penalties Your Actually Facing

Lets talk about what happens if your convicted of PPP fraud. The numbers are terrifying.

Bank Fraud – 18 USC 1344: Up to 30 years in federal prison and up to $1 million in fines per count. If you submitted a PPP application to a bank with false information, this is the charge your facing.

Wire Fraud – 18 USC 1343: Up to 20 years in federal prison (or 30 years if the fraud affected a financial institution). If you submitted your application electronically – which almost everyone did – you commited wire fraud.

False Statements to Financial Institution – 18 USC 1014: Up to 30 years in federal prison and $1 million in fines. Lying on your PPP application is a false statement.

False Statements to Federal Agents – 18 USC 1001: Up to 5 years in prison. If you lied during an interview with investigators, thats an additional charge.

Conspiracy – 18 USC 371: Up to 5 years. If anyone else was involved in preparing the application or managing the funds – your accountant, your partner, your spouse – you might face conspiracy charges too.

Aggravated Identity Theft – 18 USC 1028A: A mandatory 2 years in prison, served consecutively (after your other sentence), if you used someone elses identity or Social Security number.

These charges stack. Multiple counts of wire fraud. Multiple counts of false statements. The numbers add up fast.

The Philadelphia banker who ran a PPP fraud scheme got 65 months – thats over 5 years. And he wasnt even the main beneficiary of the fraud.

Why “I Didnt Know” Wont Save You

Most people accused of PPP fraud want to say: “I didnt know that was wrong. The rules were confusing. My accountant filled out the application. I didnt understand the requirements.”

This defense almost never works. Heres why.

Federal fraud crimes require “intent to defraud” – meaning you had to know what you were doing was wrong. But prosecutors dont need a confession. They prove intent through circumstantial evidence.

They look at patterns: Did you apply for multiple PPP loans? Did you create new businesses right before applying? Did the employee count on your application differ from your payroll records?

They look at timing: Did you make unusual transfers right after recieving PPP funds? Did you buy personal items? Did the money go somewhere other than payroll?

They look at your knowledge: Did you sign certifications on the application? Did you read the loan documents? Did you have professional help preparing the application?

If you signed the application, you certified that everything on it was true. The government will argue you should have known what you were signing.

And theres something called the “willful blindness” doctrine. If you deliberately avoided learning the truth – if you told your accountant “just make it work” without asking questions – thats legally the same as knowing.

The Whistleblower Threat You Didnt See Coming

Heres something that keeps Russian business owners up at night once they learn about it.

Federal law pays whistleblowers to report PPP fraud. Under the False Claims Act, anyone who provides information leading to a successful fraud recovery can receive between 15% and 30% of what the government collects.

Think about what that means. If your accused of $500,000 in PPP fraud, the person who reported you could receive $75,000 to $150,000. For a $1 million case, were talking about $150,000 to $300,000.

Your employees have a financial incentive to report you. Your former employees – especialy the ones who left on bad terms – have a financial incentive. Your business partners. Your competitors. Anyone who knows about your PPP loan has reason to turn you in.

And they dont need to have clean hands themselves. The person who helped you prepare the fraudulent application? They can report you and still collect the reward. The accountant who inflated the numbers? Same thing. The whistleblower rules protect them even if they were involved.

In 2024, the DOJ reported over 600 qui tam cases – thats the legal term for whistleblower lawsuits – filed specifically about pandemic relief fraud. Thats not a typo. Six hundred whistleblower cases.

Many investigations start because someone who knew about your business decided they wanted that reward money. Maybe a fired employee. Maybe a disgruntled partner. Maybe someone you trusted who decided the money was worth more than the relationship.

The whistleblower program is why so many PPP investigations seem to come out of nowhere. Your under investigation for years before you know, because someone in your life reported you.

Immigration Consequences for Russian-Americans

For Russian-American business owners, PPP fraud charges carry consequences beyond prison time and fines. Your immigration status is at stake.

PPP fraud involves crimes of moral turpitude. Wire fraud, bank fraud, making false statements – these are all considered crimes involving fraud and deception. Under immigration law, a single conviction for a crime of moral turpitude can make you deportable.

If your a lawful permanent resident – a green card holder – a PPP fraud conviction puts your status at risk. If your on a work visa, its even worse. Even if your a naturalized citizen, prosecutors have pursued denaturalization in cases involving fraud committed before citizenship was granted.

And the immigration consequences often come as a surprise. Your criminal defense attorney might negotiate what looks like a good plea deal – reduced charges, no prison time. But if that plea includes admitting to fraud, the immigration consequences can still be devastating.

For Russian-Americans, theres an additional fear. If your deported to Russia, what happens then? The current relationship between the United States and Russia means people deported there face uncertain futures. Some face prosecution upon arrival. Some face FSB scrutiny. The stakes of deportation are higher than they’ve been in decades.

This is why any PPP fraud defense for a Russian-American business owner needs to include immigration counsel. The criminal defense attorney and immigration attorney need to work together. A plea that solves the criminal problem but creates an immigration problem isnt a solution – its trading one catastrophe for another.

Defense Strategies That Actually Work

PPP fraud cases are defensible. People do beat these charges. But the defenses that work are specific and require skilled legal strategy.

Lack of Intent

If you genuinely didnt know the information was false – if you relied on records that turned out to be wrong, if you misunderstood eligibility requirements that were genuinly confusing – thats a real defense. The PPP rules changed constantly in 2020. SBA guidance was evolving in real-time. If you made a good faith effort to comply based on the guidance available, that matters.

Professional Reliance

If you relied on an accountant, lawyer, or other professional to prepare your application, their advice matters. Its not a complete defense – you still signed the application – but it goes to whether you intended to defraud anyone.

Constitutional Violations

If investigators violated your rights during the investigation – conducted illegal searches, coerced statements, failed to follow proper procedures – the evidence they obtained might be suppressed.

Challenging the Loss Amount

Under federal sentencing guidelines, the amount of “loss” affects your sentence. If prosecutors are calculating the loss wrong – counting money you actualy spent on payroll, for example – challenging that calculation can significantly reduce your sentence.

Civil Resolution

In some cases, especially for smaller loans and first-time offenders, the government may agree to resolve the matter civilly rather than criminally. This means paying back the money and a fine, but no prison time.

Three Mistakes That Guarantee Worse Outcomes

Ive seen Russian business owners destroy there own PPP cases by making preventable mistakes. Heres what to avoid.

Mistake 1: Talking to Investigators Without Counsel

This is the biggest one. When agents show up, they seem friendly. They seem like they just want to understand. But everything you say becomes evidence. Every misstatement becomes a potential false statement charge. Do not talk to federal investigators without an attorney present. Period.

Mistake 2: Destroying Documents

Once you know your under investigation – or reasonably should know – destroying any documents is obstruction of justice. Deleting emails about the PPP loan. Throwing away bank statements. Shredding applications. All of it adds charges and years to your sentence. Preserve everything.

Mistake 3: Trying to “Pay Back” the Loan Quickly

Some people think that if they just repay the loan, the problem goes away. It dosent. In fact, suddenly repaying a PPP loan can be evidence that you knew something was wrong. Prosecutors will argue: why would you repay a loan you thought was legitimate? Talk to an attorney before making any payments.

What To Do Right Now

If your facing a PPP loan investigation – wheather you’ve been contacted by agents, received a letter from the SBA, or just suspect something is wrong – heres what you need to do immediatly.

Step 1: Hire specialized counsel.

PPP fraud defense is complex. You need an attorney who understands federal criminal procedure, the specific PPP regulations, and how DOJ prosecutes these cases. This is not a job for a general business lawyer.

Step 2: Stop talking about the loan.

Do not discuss the PPP loan with anyone except your attorney. Not your accountant. Not your employees. Not your family. Anything you say can become evidence, and anyone you talk to can become a witness.

Step 3: Preserve all documents.

Gather and preserve every document related to the PPP loan. Bank statements. Payroll records. Tax returns. The application itself. Emails about the loan. Everything. Do not destroy anything.

Step 4: Understand your rights.

You have the right to remain silent. You have the right to an attorney. You have the right to decline an interview. These rights protect you. Use them.

Step 5: Dont panic about the timeline.

The 10-year statute of limitations means investigators have time. That means you have time too. Use it to prepare a proper defense rather than making desperate decisions.

PPP fraud investigations are serious. But there not automatic convictions. People do beat these charges. People do get cases dismissed or resolved civilly. The key is handling the investigation correctly from the start – especially the interview, which is were most people destroy there cases.

Your biggest protection right now is silence and legal counsel. Use both.