Criminal Defense Lawyers

San Antonio PPP Loan Fraud Lawyers

If your facing a PPP loan fraud investigation or charges in San Antonio, your not alone—and time is critical. The Western District of Texas has ramped up PPP fraud prosecutions significantly, with the U.S. Attorney’s Office in San Antonio targeting business owners who received Paycheck Protection Program loans during the COVID-19 pandemic. Weather you’ve been contacted by the FBI, received a grand jury subpoena, or you’re simply worried about potential exposure, understanding your options now could mean the difference between prison time and protecting you’re future.

Here’s the thing—most people wait to long to hire an attorney. They think they can explain away the investigation or that their case is to small to matter. That’s a dangerous mistake. The federal government don’t play around with PPP fraud, irregardless of loan amount. And the Western District of Texas? Their particularly aggressive.

Don’t wait another day. If your under investigation, the window to act is closing fast.

Understanding PPP Loan Fraud in San Antonio

PPP loan fraud refers to any intentional misrepresentation or deception in applying for, recieving, or using funds from the Paycheck Protection Program—a federal initiative designed to help small buisnesses survive the economic impact of COVID-19. The program, which was part of the CARES Act, provided forgivable loans based off payroll and certain operational expenses.

But here’s where it get’s tricky. Not every mistake is fraud. The SBA guidance was, lets be honest, confusing and inconsistant. Application requirements changed frequently, lenders interpreted rules differently, and many buisness owners acted in good faith but still made errors. The prosecutors, however, don’t always see it that way.

6 Common Types of PPP Fraud Prosecuted in the Western District of Texas

Based off cases we’ve seen in San Antonio federal court, these are the most common PPP fraud scenarios that trigger investigations:

1. Payroll Inflation Fraud

This occurs when applicants overstate the number of employees, inflate employee wages, or include non-existant employees to qualify for larger loan amounts. Prosecutors prove this by cross-referencing PPP applications with IRS quarterly payroll tax records, state unemployment insurance filings, and actual bank deposits.

Common triggers: Claiming 15 employees when tax records show 8. Reporting $500,000 in annual payroll when 941 forms show $200,000. Including “employees” who recieve no W-2 or 1099.

2. Business Affiliation Violations

The SBA has complex rules about business affiliation—basically, if you own or control multiple buisnesses, they might be considered “affiliated” for PPP purposes, which effects loan limits and eligibility. Many people didn’t understand these rules, or they intentionally tried to get around them.

Common triggers: Submitting seperate applications for affiliated entities without disclosing the connection. Creating shell companies to avoid the $10 million cap. Splitting one buisness into multiple entities just before applying.

3. Certification Fraud

Every PPP application required certifications about buisness operations, economic necessity, criminal history, and other factors. Lying on these certifications—even if the buisness otherwise qualified—is fraud under 18 U.S.C. § 1001 (false statements to federal agencies).

Common triggers: Certifying the buisness was operational on February 15, 2020 when it wasn’t. Claiming “economic uncertainty” while simultaniously posting on social media about buisness growth. Failing to disclose criminal history or debarment status.

4. Ineligible Business Fraud

Some buisnesses simply don’t qualify for PPP loans—either because of their buisness type, ownership structure, or operational status. Applying anyway, or misrepresenting the buisness to appear eligible, constitutes fraud.

Common triggers: Non-existent buisnesses (no tax filings, no bank records). Recently formed shell companies with no operational history. Ineligible buisness types like lobbying firms, speculative real estate ventures, or illegal operations.

5. Loan Proceeds Misuse

PPP funds was supposed to be used for payroll, rent, utilities, and other eligible expenses. Using the money for personal purchases, luxury items, or unauthorized expenses is fraud—even if you qualified for the loan initially.

Common triggers: Buying luxury vehicles, jewelry, or taking expensive vacations within weeks of loan funding. Gambling with PPP proceeds. Transfering funds to unrelated personal accounts. Making large cash withdrawls immediately after receiving funds.

6. Loan Stacking

This involves applying to multiple lenders simultaniously, receiving multiple PPP loans when only one was allowed, or combining PPP with EIDL (Economic Injury Disaster Loan) in ways that exceed program limits.

Common triggers: Two or more PPP loans for the same buisness. Total loan amounts exceeding 2.5x monthly payroll (the program limit). Overlapping PPP and EIDL proceeds used for same expenses.

Look—I’ve seen cases where someone genuinely didn’t know they was breaking the rules. And I’ve seen cases where the intent was clear from day one. The government’s job is to prove you knowingly committed fraud, which means they need to show you understood what you was doing was wrong. That’s where defense strategy comes in.

How PPP Fraud Investigations Begin

Most people are shocked when they first learn their under investigation. “How did they even find out?” Here’s the reality: the government has multiple ways of identifying potential PPP fraud, and they’re using all of them in San Antonio.

SBA Office of Inspector General Audits

The SBA OIG conducts both random and targeted audits of PPP loans. Initially, they focused on loans over $2 million, but now their looking at smaller amounts to. The audit process involves comparing application data with IRS records, state unemployment filings, and previous SBA loan data.

If discrepancys are found—like payroll numbers that don’t match tax records—the case get’s referred to the FBI or Secret Service for criminal investigation.

Bank Suspicious Activity Reports (SARs)

PPP lenders are required to file SARs when they detect unusual or suspicious activity. This could of been triggered by:

• Large cash withdrawls shortly after loan funding
• Wire transfers to unrelated accounts
• Luxury purchases that seem inconsistant with buisness needs
• Account activity that don’t match the stated buisness purpose

Once a SAR is filed, it goes to the Financial Crimes Enforcement Network (FinCEN), which shares it with federal law enforcement. Your bank won’t tell you they filed a SAR—your first indication might be FBI agents showing up at you’re door.

Whistleblower Complaints

Alot of PPP fraud cases in San Antonio start with tips from disgruntled employees, former buisness partners, or competitors. The False Claims Act allows whistleblowers to file qui tam lawsuits and recieve 15-30% of any recovery, which creates a financial incentive to report fraud.

Common whistleblower scenarios include:

• An employee who knows payroll was inflated
• A ex-partner in a buisness dispute
• A bookkeeper who was asked to falsify records
• A competitor who suspects fraud based off public loan data

Whistleblower cases are filed under seal, meaning you might not know about the investigation for months or even years.

Cross-Agency Data Matching

Federal agencies share data, and their getting better at catching inconsistancys. The SBA cross-references PPP applications with:

• IRS payroll tax records (Forms 941, 940)
• State unemployment insurance filings
• Previous SBA loan databases
• Treasury Department analytics and fraud detection algoritms

If you’re PPP application shows 20 employees but you’re tax records show 5, that discrepancy gets flagged automatically.

The Investigation Timeline: What to Expect

Understanding the typical timeline helps you realize when to act. Here’s how most PPP fraud cases progress in San Antonio:

Months 0-6: Initial trigger (audit, SAR, whistleblower) occures. At this point, you probly don’t know your under investigation. The SBA OIG or FinCEN is reviewing data.

Months 6-12: FBI or Secret Service begins formal investigation. They might interview witnesses (employees, accountants, buisness partners) without contacting you directly. This is when other people start getting questioned about you’re buisness.

Months 12-18: This is the critical “Golden Window.” You might recieve a target letter (informing you that you’re the target of a grand jury investigation) or a grand jury subpoena for documents. Or maybe you’re attorney gets contacted for a proffer session. This is you’re best opportunity to intervene, cooperate, or negotiate before charges are filed.

Months 18-24: The government decides weather to indict or decline prosecution. If they indict, you’ll be arrested or summoned for an initial appearance in federal court. If they decline, you might never hear about it—the investigation just goes away.

The key insight here? Most people wait until after indictment to hire an attorney. By then, you’ve lost critical negotiation leverage. The time to act is during that Golden Window—when the investigation is known but charges haven’t been filed yet.

Federal Charges and Penalties in the Western District of Texas

Lets talk about what your actually facing if prosecutors decide to move forward. PPP fraud cases in San Antonio typically involve one or more of these federal charges:

Primary Federal Charges

Bank Fraud (18 U.S.C. § 1344)

Bank fraud involves knowingly executing a scheme to defraud a financial institution or to obtain money from a bank by false pretenses. Since PPP loans was issued by banks (even though they was federally guaranteed), prosecutors charge bank fraud in most PPP cases.

Maximum Penalty: Up to 30 years imprisonment, up to $1 million fine

This is the most serious charge you’ll face, and prosecutors use it liberally in PPP cases. The government must prove you knowingly engaged in a scheme to defraud, but they don’t need to prove you was succesful or that the bank actually lost money—the attempt is enough.

Wire Fraud (18 U.S.C. § 1343)

Wire fraud is similar to bank fraud but focuses on the use of electronic communications (email, internet, phone) to commit fraud. Since virtually all PPP applications was submitted electronically, wire fraud is easy for prosecutors to prove.

Maximum Penalty: Up to 20 years imprisonment, fines

Each email, each online application submission, each electronic signature potentially constitutes a seperate count of wire fraud. I’ve seen cases where prosecutors charged 10+ counts of wire fraud based off a single PPP application and related communications.

False Statements (18 U.S.C. § 1001)

This statute makes it illegal to knowingly make false statements to federal agencies. Every certification on a PPP application is a statement to the SBA, a federal agency.

Maximum Penalty: Up to 5 years imprisonment

This charge don’t require proving a complex fraud scheme—just that you made a false statement that was material (important) to the SBA’s decision. Its often charged along with bank fraud and wire fraud.

Conspiracy (18 U.S.C. § 371)

If more then one person was involved in the PPP fraud—even minimally—prosecutors will charge conspiracy. This could include you’re spouse who co-signed the application, a buisness partner who reviewed it, or an accountant who prepared it.

Maximum Penalty: Up to 5 years imprisonment

The scary thing about conspiracy? You don’t have to be the main player. If you simply agreed to participate and took even one small step toward the fraud (like signing a document or sending an email), you’re guilty of conspiracy. And everyone in the conspiracy is responsible for the total loss amount, not just their share.

Money Laundering (18 U.S.C. § 1956/1957)

Using fraudulently obtained PPP proceeds for personal expenses can be charged as money laundering. This includes buying luxury items, transfering funds to hide their origin, or structuring transactions to avoid reporting requirements.

Maximum Penalty: Up to 20 years imprisonment

Money laundering charges significantly increase the seriousness of a PPP fraud case and often lead to asset forfeiture—meaning the government can seize you’re property, bank accounts, vehicles, and other assets purchased with PPP funds.

U.S. Sentencing Guidelines Explained

Alright, this is where it get’s real. Federal judges use the U.S. Sentencing Guidelines to calculate recommended sentence ranges. For fraud offenses (including PPP fraud), the primary guideline is §2B1.1.

The guideline starts with a base offense level, then adds or subtracts levels based off specific factors. The final offense level, combined with you’re criminal history category, determines the sentencing range. Here’s how it works for PPP fraud:

Base Offense Level: 6 or 7 (depending on the specific statute)

Loss Amount Enhancement (the big one):

So if you fraudulently obtained a $200,000 PPP loan, that’s a +14 level enhancement right there. But it don’t stop their.

Enhancement Factors for PPP Fraud

The following enhancements almost always apply to PPP fraud cases:

Sophisticated Means (+2 levels): If the fraud involved sophisticated means—like creating fake documents, using multiple entities, or complex financial transactions—you get hit with 2 more levels. Prosecutors argue that any PPP fraud involved sophisticated means because applications required documentation and planning.

Government Program Targeting (+2 levels): Since PPP was a government benefit program, prosecutors add 2 levels for targeting a government program. This is automatic in PPP cases.

Number of Victims (+2 to +6 levels): If the fraud involved 10+ victims, add 2 levels. 50+ victims, add 4 levels. In PPP cases, prosecutors sometimes argue that each employee who didn’t recieve payroll is a “victim,” or that taxpayers generally are victims.

Role in the Offense: If you was the organizer or leader of fraud involving others, add 3-4 levels. If you was a minor participant, subtract 2-4 levels.

Obstruction of Justice (+2 levels): If you destroyed documents, lied to investigators, or otherwise obstructed the investigation, add 2 levels.

Acceptance of Responsibility (-2 or -3 levels): If you plead guilty and accept responsibility early, you can subtract 3 levels. This is one of the few ways to reduce you’re offense level.

Let’s do the math on a typical case:

• Base offense level: 7
• Loss amount $200,000: +14
• Sophisticated means: +2
• Government program: +2
• Acceptance of responsibility: -3
• Final offense level: 22

For a defendant with no criminal history (Category I) and offense level 22, the guideline range is 41-51 months in federal prison. That’s over three years for a $200,000 loan.

And that ain’t all. You’ll also face:

• Restitution: You must repay the full loan amount to the SBA
• Forfeiture: Any property purchased with PPP funds can be seized
• Supervised Release: Typically 3 years after release from prison
• Fines: Up to $250,000 or twice the gross gain/loss

Collateral Consequences Beyond Prison

Here’s what alot of people don’t realize—a PPP fraud conviction has consequences that extend way beyond prison time.

Professional Licenses

Many professional licenses require disclosure of criminal convictions, and fraud convictions (crimes of moral turpitude) often result in license suspension or revocation:

• Medical licenses (doctors, nurses, pharmacists)
• Legal licenses (attorneys, paralegals)
• Accounting certifications (CPAs, enrolled agents)
• Real estate licenses
• Contractor licenses
• Insurance licenses

For professionals in San Antonio, this can mean the end of you’re career. I’ve worked with doctors who faced PPP fraud charges and realized they could loose everything they’d built—not just face prison time, but loose the ability to practice medicine permanently.

Immigration Consequences

For San Antonio’s significant immigrant population, PPP fraud carries particularly severe immigration consequences:

Deportability: Fraud offenses are crimes involving moral turpitude (CIMT). A CIMT conviction makes you deportable if it occurs within 5 years of admission and carries a potential sentence of 1 year or more. Additionally, fraud involving a loss over $10,000 is an “aggravated felony” under immigration law, which makes you deportable regardless of when it occured.

Inadmissibility: Even if your not deported, a fraud conviction makes you inadmissible for future visa applications, green card renewals, or re-entry to the US after traveling abroad.

Naturalization Bars: A fraud conviction can prevent you from naturalizing as a US citizen, and in some cases can result in denaturalization (revocation of citizenship if you was already naturalized).

This is critical: if your not a US citizen, you need an attorney who understands both federal criminal law and immigration law. The plea agreement that seems good from a criminal perspective could be disastrous from an immigration perspective.

Federal Benefits and Opportunities

A PPP fraud conviction results in loss of various federal benefits and opportunities:

• Debarment from federal contracts (if you’re a government contractor)
• Permanent ineligibility for SBA loans
• Exclusion from Medicare/Medicaid (if you’re a healthcare provider)
• Loss of federal student aid eligibility
• Inability to obtain FHA loan guarantees
• Security clearance revocation

Business Consequences

Beyond personal consequences, you’re buisness faces:

• Dissolution or forced sale of the buisness entity
• Loss of buisness licenses and permits
• Destruction of buisness credit and reputation
• Inability to obtain future financing
• Loss of vendor and customer relationships

The Western District of Texas Federal Court System

If your facing PPP fraud charges in San Antonio, you’ll be prosecuted in the Western District of Texas, which covers a massive geographic area including San Antonio, Austin, El Paso, Del Rio, Midland, Pecos, and Waco. Understanding this court system is critical to understanding you’re case.

San Antonio Division: What to Expect

Most San Antonio PPP fraud cases are handled at the John H. Wood Jr. United States Courthouse located at 655 E. Durango Boulevard in downtown San Antonio. This is where you’ll appear for all court proceedings if your case is in the San Antonio Division.

The courthouse houses:

• U.S. District Court judges (who handle trials and major motions)
• U.S. Magistrate judges (who handle initial appearances, detention hearings, and pretrial matters)
• U.S. Probation and Pretrial Services offices
• The Clerk’s office

Key Federal Entities Prosecuting PPP Fraud

Several federal agencies work together on PPP fraud investigations and prosecutions in San Antonio:

U.S. Attorney’s Office for the Western District of Texas: The main office is in San Antonio, led by the U.S. Attorney. Assistant U.S. Attorneys (AUSAs) handle prosecution of PPP fraud cases. The Western District has made PPP fraud a priority, and their not backing down.

FBI San Antonio Division: The FBI’s San Antonio Field Office investigates the majority of PPP fraud cases in the area. Special agents conduct interviews, execute search warrants, and gather evidence for prosecution.

U.S. Secret Service: The Secret Service, which investigates financial crimes in addition to protective duties, also handles PPP fraud investigations, particularly cases involving identity theft or sophisticated financial schemes.

SBA Office of Inspector General (OIG): The SBA OIG conducts audits and investigations of PPP loans and refers cases to the FBI and Secret Service for criminal prosecution. Their often the starting point for investigations.

DOJ COVID-19 Fraud Strike Force: This specialized team within the Department of Justice focuses specifically on pandemic-related fraud, including PPP fraud. They coordinate with local U.S. Attorney’s Offices to prosecute significant cases.

Local Court Procedures

Understanding Western District procedures helps you know what to expect:

Initial Appearance

If your arrested or surrender on a warrant, you’ll have an initial appearance before a magistrate judge within 24-48 hours. At this hearing:

• You’ll be informed of the charges against you
• The judge will advise you of you’re rights
• You’ll be asked if you want a court-appointed attorney (if you can’t afford one)
• The judge will address detention vs. release

Detention Hearing

If the government seeks to detain you pending trial, a detention hearing will be held (usually within 3-5 days of initial appearance). The judge considers:

• Weather you’re a flight risk
• Weather you pose a danger to the community
• The seriousness of the charges
• You’re ties to the community
• You’re criminal history

For PPP fraud cases, most defendants are released on bond with conditions (electronic monitoring, travel restrictions, surrender of passport). However, if the fraud was particularly large or you have prior convictions, detention is possible.

Pretrial Services

If your released, you’ll be supervised by Pretrial Services, which means:

• Regular check-ins (in person, by phone, or electronically)
• Drug testing (if ordered)
• Employment verification
• Travel restrictions (can’t leave the district without permission)
• Compliance with all court orders

Violating pretrial release conditions can result in you’re bond being revoked and detention pending trial.

Judges and Magistrates

The Western District has multiple judges who might handle you’re case. In San Antonio, judges include:

• Chief Judge Orlando L. Garcia
• Judge Xavier Rodriguez
• Judge Fred Biery
• Judge David Ezra
• Several Magistrate Judges who handle pretrial matters

Each judge has their own procedures, preferences, and sentencing tendencies. An experienced Western District attorney knows these judges, understands their courtrooms, and can tailor strategy accordingly.

Defense Strategies for PPP Fraud Cases

So—what can you actually do to defend against PPP fraud charges? Alot depends on the specific facts of you’re case, but here are the most effective defense strategies we use in San Antonio PPP fraud cases.

The Intent Defense: Proving Good Faith

The government must prove you knowingly committed fraud—that you intended to deceive. If you made mistakes but acted in good faith, that’s not criminal fraud.

This defense works when:

• You relied on incorrect information from you’re accountant or lender
• SBA guidance was unclear or contradictory at the time you applied
• You made honest errors in calculating payroll or expenses
• You misunderstood complex affiliation rules

To prove good faith, we show:

• You sought professional advice before applying
• You attempted to comply with the rules as you understood them
• You self-corrected when you discovered errors
• You have no history of fraud or dishonesty

The key is demonstrating that you’re actions was consistent with someone trying to follow the rules, not someone trying to steal government money.

SBA Guidance Ambiguity Defense

Look—the SBA guidance during the PPP program was a mess. Rules changed weekly, interim final rules was issued and then modified, lenders interpreted requirements differently, and the whole program was rushed out in unprecedented circumstances.

This defense focuses on the timing and clarity of SBA guidance:

• Guidance issued after you applied: If SBA clarified a rule after you submitted you’re application, you can’t be held criminally liable for not following guidance that didn’t exist yet.
• Conflicting guidance: If different SBA documents said different things, reasonable people could disagree about the correct interpretation.
• Lender interpretation: If you’re lender told you something was acceptable (even if it wasn’t), that shows good faith reliance.

But here’s the thing—this defense has to be presented carefully. Prosecutors have developed a counter-argument: if you was sophisticated enough to review SBA guidance, you was sophisticated enough to know the rules. So we focus on when guidance was issued and what lenders told you, rather than just claiming confusion.

Mistake of Fact vs. Mistake of Law

A mistake of fact can be a defense. A mistake of law generally ain’t.

Mistake of fact means you was wrong about the underlying facts. For example:

• You genuinely believed you had 15 employees because you counted contractors you thought was employees
• You thought certain businesses was affiliated because of incorrect information from you’re accountant
• You miscalculated payroll because you included certain benefits you thought was allowable

Mistake of law means you knew the facts but misunderstood the legal requirements. For example:

• “I didn’t know it was illegal to use PPP funds for personal expenses”
• “I didn’t realize that certification was important”

Mistake of fact can negate intent—if you didn’t know the true facts, you couldn’t have intended to deceive. Mistake of law is harder because “ignorance of the law is no excuse.” However, in complex regulatory schemes like PPP, some courts recognize that mistaken understanding of complicated regulations can negate specific intent.

Challenging the Evidence

Sometimes the best defense is attacking the prosecution’s evidence:

Insufficient evidence of intent: The government might prove you made false statements, but can they prove you knew they was false and intended to defraud? If there evidence is circumstantial or ambiguous, we challenge weather it proves intent beyond a reasonable doubt.

Document authentication issues: Prosecutors often rely on documents—applications, bank records, tax filings. We challenge weather those documents are authentic, accurate, and admissible under the rules of evidence.

Witness credibility: If the government’s case relies on testimony from business partners, employees, or co-conspirators who received immunity or plea deals, we attack there credibility and motives to lie.

Fourth Amendment violations: If evidence was obtained through illegal searches or seizures, we file motions to suppress that evidence.

Fifth Amendment violations: If you made statements to investigators without proper Miranda warnings or after invoking you’re right to counsel, we move to exclude those statements.

Lack of Materiality

Even if you made false statements, they must be “material”—meaning they could have influenced the lender’s or SBA’s decision. If you’re false statement was immaterial (didn’t affect the outcome), its not fraud.

For example:

• If you would of qualified for the same loan amount even with accurate information, the false statement wasn’t material
• If the error was in a certification that didn’t affect eligibility or loan amount, it may not be material
• If the lender didn’t actually rely on the false information, it wasn’t material

This is a technical defense that requires careful analysis of what information actually mattered to the lending decision.

When Cooperation Makes Sense

Sometimes the best strategy ain’t fighting the charges—its cooperating with the government to mitigate you’re exposure.

Cooperation might make sense when:

• The evidence against you is strong and a trial would likely result in conviction
• You have information about other people’s fraud that the government wants
• You want to minimize you’re sentence through a cooperation agreement
• You’re willing to testify against co-defendants or other targets

Cooperation can result in:

• Reduced charges (fewer counts, less serious offenses)
• Substantial assistance departures (5K1.1 motion) that can reduce you’re sentence below the guideline range
• Recommendations for probation instead of prison
• Protection from additional charges the government discovers during cooperation

But cooperation has risks to:

• You might have to testify in court, including cross-examination
• You’re cooperation might put you or you’re family at risk from others involved in fraud
• If you lie or withhold information during cooperation, you loose all benefits and can be charged with additional crimes

The decision to cooperate should only be made after careful consultation with an experienced attorney who can evaluate weather cooperation is in you’re best interest and negotiate the best possible cooperation agreement.

Resolution Options and Sentencing Mitigation

Alright—lets say your not going to trial. What are you’re options for resolving the case and minimizing the damage?

Cooperation Agreements (5K1.1)

A cooperation agreement is a formal arrangement where you agree to provide substantial assistance to the government in exchange for sentencing benefits.

The process works like this:

1. Proffer session: You’re attorney negotiates a “Queen for a Day” agreement where you meet with prosecutors and investigators to tell them what you know. Statements made during the proffer generally can’t be used against you (with exceptions).
2. Cooperation agreement: If the government finds you’re information valuable, they’ll offer a cooperation agreement outlining what your required to do (provide documents, testify, debriefings, etc.).
3. Fulfillment: You complete the cooperation as required.
4. 5K1.1 motion: At sentencing, the government files a motion for downward departure based off you’re substantial assistance, which allows the judge to sentence below the guideline range.

The reduction can be significant—I’ve seen cooperation turn a 5-year guideline sentence into probation. But it requires genuine, valuable information and complete honesty.

Fast-Track Plea Programs

Some federal districts offer fast-track plea programs that allow defendants to plead guilty early in exchange for a 2-4 level offense level reduction. In the Western District of Texas, fast-track availability for PPP fraud cases is limited and depends on:

• No prior federal convictions
• Loan amount under $100,000 (usually)
• No leadership role in the fraud
• No obstruction of justice
• Early cooperation and acceptance of responsibility

If fast-track is available, it can reduce a sentence significantly. For example, a 4-level reduction on a case with offense level 22 could reduce the guideline range from 41-51 months to 27-33 months—saving over a year in prison.

The key is acting early. Fast-track is generally only available if you plead guilty before indictment or very soon after.

Voluntary Disclosure Benefits

If you realize you made fraudulent statements on you’re PPP application but haven’t been contacted by investigators yet, voluntary disclosure might be an option.

Voluntary disclosure means coming forward before the government discovers the fraud. Benefits include:

• Possibility of declination (no prosecution)
• Reduced charges if prosecution does occur
• Strong evidence of lack of criminal intent
• Acceptance of responsibility credit at sentencing
• Avoiding obstruction charges

However, voluntary disclosure must be truly voluntary (before investigation begins) and complete (full disclosure of all fraud). If the government already knows about the fraud, coming forward isn’t voluntary disclosure—its just cooperation.

Restitution and Repayment Timing

When you repay the fraudulently obtained PPP loan matters enormously:

Repayment before investigation: If you repay before the SBA or FBI starts investigating, you might avoid prosecution entirely. At a minimum, it provides strong evidence of lack of criminal intent and good faith.

Repayment during investigation (before charges): This is the sweet spot. Repaying during the “Golden Window” shows acceptance of responsibility, eliminates or reduces the loss amount for sentencing purposes, and demonstrates you’re not a continued danger to the community. It can be the difference between prison and probation.

Repayment after indictment: Still helpful for sentencing mitigation, but much less impactful. The government will argue you only repaid because you got caught. You’ll still get credit toward restitution, but it won’t reduce you’re offense level.

Repayment after conviction: This only reduces the restitution amount you still owe. No sentencing benefit.

The strategic question is when and how to make repayment. Sometimes its worth borrowing money or liquidating assets to make full repayment during the investigation phase because the sentencing benefit far exceeds the financial cost.

Alternative Sentencing Options

For first-time offenders with lower offense levels, alternatives to prison might be possible:

Probation: If you’re guideline range is in Zone A or B of the sentencing table, probation (possibly with home confinement) might be available instead of prison.

Home Confinement: Even if some prison time is required, the judge might order a portion served in home confinement with electronic monitoring rather than in federal prison.

Halfway House: The Bureau of Prisons can place you in a halfway house (residential reentry center) for the final 6-12 months of you’re sentence instead of in a federal prison.

Sentencing Variances: Even if the guidelines recommend prison, the judge can “vary” from the guidelines based off mitigating factors specific to you’re case (family circumstances, health issues, extraordinary acceptance of responsibility, community ties, etc.).

These alternatives require strong advocacy from you’re attorney, demonstrating why you deserve a sentence below the guidelines despite the seriousness of the offense.

Special Considerations: Business Partners, Immigration, Qui Tam

PPP fraud cases often have complications beyond the basic criminal charges. Here are three critical issues that come up regularly in San Antonio cases.

Spouse and Business Partner Exposure

If you’re facing PPP fraud charges, people around you might be in danger to:

Conspiracy charges: Anyone who knew about the fraud and took even minimal steps to help can be charged with conspiracy. This includes:

• A spouse who co-signed the PPP application
• A business partner who reviewed and approved the application
• An accountant who prepared fraudulent supporting documents
• An employee who provided false payroll information

The scary part? In a conspiracy, everyone is responsible for the total loss amount, not just they’re individual share. So a spouse who signed one document could face the same sentencing exposure as the person who orchestrated the entire fraud.

Aiding and abetting: Even without a conspiracy, anyone who knowingly helped commit the fraud can be charged as an aider and abettor under 18 U.S.C. § 2. This carries the same penalties as the principal offense.

When separate counsel is needed: If you and you’re spouse or business partner are both implicated, you need separate attorneys. Joint representation creates conflicts of interest because:

• One person might benefit from cooperating against the other
• Defense strategies might conflict (one claims lack of knowledge, the other claims good faith)
• Plea negotiations might require one person to provide information about the other

I’ve seen cases where spouses tried to use the same attorney to “save money,” only to realize to late that they needed seperate representation. By then, privileged communications had been shared, and the situation was compromised.

Immigration Consequences (Deportability and Inadmissibility)

For non-citizens in San Antonio, PPP fraud has potentially devastating immigration consequences that go beyond the criminal sentence.

Deportability: PPP fraud is almost always a crime involving moral turpitude (CIMT) because it involves fraud and dishonesty. Under immigration law:

• One CIMT conviction within 5 years of admission (with possible sentence of 1 year or more) makes you deportable
• Two CIMT convictions at any time makes you deportable
• An aggravated felony conviction makes you deportable (fraud with loss over $10,000 qualifies)

If you’re deportable, you face removal proceedings regardless of how long you’ve been in the US, weather you have US citizen family members, or weather you’ve paid you’re debt to society through criminal punishment.

Inadmissibility: Even if you avoid deportation, a fraud conviction makes you inadmissible, which means:

• You can’t get a green card (or renew one)
• You can’t get most visas
• If you travel outside the US, you might not be allowed back in
• You can’t adjust status from one visa category to another

Naturalization bars: If your applying for citizenship, a fraud conviction will result in denial. If you’ve already naturalized, the conviction could lead to denaturalization proceedings (revocation of citizenship) if the government alleges you obtained citizenship fraudulently or wasn’t eligible.

Padilla warnings: Under Padilla v. Kentucky, you’re criminal defense attorney has a constitutional obligation to advise you of immigration consequences before you plead guilty. If you’re attorney fails to warn you, that could be grounds for ineffective assistance of counsel.

The critical point: plea negotiations must consider immigration consequences. Sometimes a plea that seems worse from a criminal perspective is actually better from an immigration perspective, and vice versa. You need an attorney who understands both systems.

False Claims Act Whistleblower Cases

Many PPP fraud cases in San Antonio originate from qui tam whistleblower lawsuits filed under the False Claims Act (FCA).

Here’s how it works:

1. Whistleblower files sealed lawsuit: A person with knowledge of fraud (employee, business partner, accountant) files a civil lawsuit alleging false claims to the government. The lawsuit is filed under seal, meaning you don’t know about it.
2. Government investigation: The Department of Justice investigates the allegations for 60+ days (often extended to a year or more). During this time, both civil and criminal investigations might be running in parallel.
3. Government intervention decision: DOJ decides weather to intervene (take over the lawsuit) or decline (let the whistleblower proceed alone).
4. Parallel criminal case: If the government finds evidence of criminal fraud during the civil investigation, they’ll often pursue criminal charges separately.
5. Whistleblower recovery: If the government recovers money through the lawsuit or settlement, the whistleblower receives 15-30% as a reward.

Why this matters:

• You might be facing both civil and criminal liability without knowing it
• Statements you make in the civil case can be used against you in the criminal case
• Different defense strategies may be needed for civil vs. criminal
• The whistleblower has a financial incentive to provide detailed, damaging testimony

If you learn about a qui tam lawsuit or suspect one has been filed, you need counsel experienced in handling parallel civil and criminal proceedings. The strategies for each must be coordinated carefully to avoid undermining one case while defending the other.

What to Do If You’re Under Investigation

If you suspect or know your under investigation for PPP fraud, here’s what you need to do right now—and what you absolutely should NOT do.

DO:

1. Hire an attorney immediately. Don’t wait for charges to be filed. The investigation phase is when you have the most leverage to potentially avoid charges, negotiate favorable terms, or prepare the strongest possible defense. Once your arrested, you’ve lost critical time and opportunities.

2. Stop talking about the case. Don’t discuss the investigation with anyone except you’re attorney. Not you’re spouse, not you’re business partner, not you’re accountant, not you’re friends. Anything you say can be used against you, and people can be compelled to testify.

3. Preserve all documents. You have a legal obligation to preserve evidence once you know about an investigation. This includes:

• PPP loan applications and supporting documents
• Bank records and financial statements
• Tax returns and payroll records
• Emails, text messages, and other communications
• Business records

4. Document everything about you’re PPP application. Write down (for you’re attorney only) everything you remember about:

• Who helped prepare the application
• What guidance you reviewed
• What you’re lender told you
• Why you made the decisions you did
• Any mistakes or errors you realize now

5. Stop using social media. Seriously. Prosecutors monitor social media, and anything you post can and will be used against you. Posts about vacations, purchases, buisness success, or even innocent comments can be twisted to show fraud or lack of remorse.

DON’T:

1. Don’t talk to federal agents without you’re attorney present. If FBI or Secret Service agents contact you, politely decline to speak with them and tell them to contact you’re attorney. You have a constitutional right to remain silent and to have an attorney present during questioning. Use it.

Many people think talking to agents will “clear things up” or make them “look innocent.” That’s wrong. Agents are trained interrogators, and even truthful statements can be misinterpreted or used against you later. And if you make even a minor false statement to federal agents, that’s a separate crime under 18 U.S.C. § 1001.

2. Don’t destroy or alter documents. This is obstruction of justice, which is a seperate federal crime that carries additional prison time and sentencing enhancements. Even deleting emails or shredding old files can be charged as obstruction if you know about an investigation.

3. Don’t contact witnesses or co-defendants. Reaching out to other people involved to “get your stories straight” is witness tampering and obstruction. Let you’re attorney handle all communications with other parties.

4. Don’t make large financial transactions. Moving money between accounts, transfering assets to family members, or making large purchases during an investigation looks like your trying to hide assets or spend money before it can be seized. This hurts you’re credibility and can lead to additional money laundering charges.

5. Don’t ignore a grand jury subpoena. If you recieve a grand jury subpoena (for testimony or documents), you must respond. Ignoring it is contempt of court. However, you can assert you’re Fifth Amendment right against self-incrimination if testifying could expose you to criminal liability. You’re attorney will help you determine the appropriate response.

When to Hire an Attorney

The answer is simple: now. Not tomorrow. Not next week. Not after you “see what happens.” Now.

Hire an attorney if:

• You’ve been contacted by FBI, Secret Service, or other federal agents
• You’ve recieved a target letter or grand jury subpoena
• You’ve been arrested or charged
• You know someone else involved in you’re PPP application is under investigation
• You’ve recieved a letter from the SBA OIG or you’re lender questioning you’re loan
• You suspect you made fraudulent statements on you’re application

But also hire an attorney if:

• You simply have concerns about whether you’re PPP application was accurate
• You want to explore voluntary disclosure options
• You want to understand you’re exposure before any investigation begins

Early intervention is everything in federal cases.

What to Bring to You’re Initial Consultation

To make the most of you’re consultation with a PPP fraud defense attorney, gather:

• PPP loan application and all supporting documents you submitted
• Loan approval and funding documents from you’re lender
• Bank statements showing how PPP funds was used
• Payroll records, tax returns (Forms 941, 940, W-2s, 1099s)
• Any correspondence with the SBA, you’re lender, or federal agents
• Target letters, grand jury subpoenas, or other legal documents
• A timeline of events (when you applied, received funds, how you used them, when contacted by investigators)

Even if you don’t have all these documents, come to the consultation anyway. The attorney can help you obtain what’s needed.

Why Western District of Texas Experience Matters

Look, not all federal defense attorneys are created equal. And when it comes to PPP fraud in San Antonio, having an attorney with specific Western District of Texas experience makes a huge diffrence.

Here’s why:

1. Knowledge of local prosecutors. The Assistant U.S. Attorneys who prosecute PPP fraud cases in San Antonio have there own styles, priorities, and negotiation approaches. An attorney who regularly practices in Western District knows these prosecutors, understands what arguments resonate with them, and has established credibility.

2. Understanding of local judges. Federal judges have broad discretion in sentencing and case management. Knowing whether a particular judge is receptive to certain defense arguments, how they typically sentence fraud cases, and what they value at sentencing is invaluable.

3. Familiarity with local procedures. The Western District has specific local rules, electronic filing requirements, and procedural practices that differ from other districts. An attorney who practices regularly in this district knows how things work and can navigate the system efficiently.

4. Relationships with Pretrial Services and Probation. These offices prepare important reports that influence detention and sentencing decisions. An attorney with local experience knows the personnel and can advocate effectively with these offices.

5. PPP fraud specialization. PPP fraud is not like other federal crimes. It involves specific statutes, regulations, sentencing considerations, and defenses unique to pandemic relief programs. An attorney who has handled PPP fraud cases understands the nuances that a general criminal defense attorney might miss.

This ain’t the time to hire someone’s nephew who “does some criminal defense” or a lawyer who practices in a different federal district and thinks “federal court is federal court.” The stakes are to high.

You need someone who:

• Practices regularly in the Western District of Texas
• Has specific experience with PPP fraud defense
• Understands federal sentencing guidelines inside and out
• Can negotiate cooperation agreements and plea deals
• Is prepared to take the case to trial if necessary
• Understands collateral consequences (immigration, professional licenses, etc.)

The diffrence between a good outcome and a disaster often comes down to having the right attorney at the right time. Early intervention by an experienced Western District PPP fraud defense attorney can mean the diffrence between prison time and probation, between deportation and staying with you’re family, between losing you’re professional license and protecting you’re career.

Don’t face PPP fraud charges alone. The federal government has unlimited resources, experienced prosecutors, and sophisticated investigators working against you. You need an attorney who can level the playing field and protect you’re rights.

If your under investigation or facing charges for PPP loan fraud in San Antonio or anywhere in the Western District of Texas, contact an experienced federal defense attorney today for a confidential consultation. Time is critical, and the decisions you make now will impact the rest of you’re life.