Criminal Defense Lawyers

Wisconsin PPP Loan Fraud Lawyers: Federal Defense When Your COVID Loan Triggers an Investigation

Wisconsin has two federal districts prosecuting PPP fraud, and federal prosecutors told The Badger Project they’ve charged nearly 40 people as of January 2024. The Eastern District in Milwaukee just extracted $10.8 million from affiliated companies that thought they were following the rules. The Western District in Madison convicted Eric Upchurch in June 2024 and sentenced him to 28 months after tracing his fraud through Bitcoin purchases. If you received a PPP loan in Wisconsin, your case could end up in either courthouse depending on where you live.

This article will tell you exactly what Wisconsin defendants have faced. Not theoretical maximums that never actually happen. Real sentences from real cases prosecuted in both the Eastern and Western Districts. Thomas Smith got 57 months for a multi-company scheme. Sharon Johnson got 3 months for a smaller fraud. Eric Upchurch got 28 months partly because investigators traced his money into cryptocurrency. The difference between these outcomes comes down to factors most lawyers won’t explain.

Here’s what nobody else will tell you: a Milwaukee street gang called the Wild 100s used PPP and pandemic unemployment fraud to fund murder-for-hire. Thirty gang members got charged. And legitimate businesses with affiliate relationships have paid millions in civil settlements for unknowingly violating the 500-employee rule. PPP fraud in Wisconsin isn’t just about individual fraudsters. It’s about organized crime, corporate liability, and enforcement patterns that reach further than most people realize.

Which Federal Court Will Handle Your Wisconsin PPP Case?

Wisconsin has two separate federal judicial districts, and this matters for your case. The Eastern District of Wisconsin is based in Milwaukee and covers Milwaukee, Racine, Kenosha, Green Bay, and surrounding areas. The Western District of Wisconsin is based in Madison and covers Madison, La Crosse, Eau Claire, and the rest of the state. Each district has its own U.S. Attorney’s office, its own judges, and its own prosecutors handling PPP fraud cases.

If you applied for your PPP loan in Milwaukee, your case will likely be prosecuted in the Eastern District. If you’re in Madison, it goes to the Western District. This isn’t just administrative trivia. Different districts have different patterns. The Eastern District just settled a civil case for $10.8 million against affiliated companies. The Western District convicted Eric Upchurch at trial and got a 28-month sentence. Knowing which district you’re in helps you understand what you’re facing.

The two districts sometimes coordinate on large conspiracy cases that cross geographic boundries. The Thomas Smith conspiracy involved defendants from both Milwaukee and Chicago, all prosecuted together in the Eastern District. If you have business partners or co-applicants in different parts of the state, your case could be consolidated into either district based on were the core conduct occured.

What Federal Charges Can You Face for PPP Fraud in Wisconsin?

The government uses the same federal fraud statutes in Wisconsin that they use everywhere else. Wire fraud under 18 USC 1343 is the most common charge because you submitted your application electronically. Maximum penalty is 20 years, but it jumps to 30 years if the fraud affected a financial institution. Since every PPP loan went through a bank, prosecutors gonna argue for the higher maximum.

Bank fraud under 18 USC 1344 carries up to 30 years and a $1 million fine. Thomas Smith pled guilty to bank fraud for his $1.2 million scheme across eight companies. Stephen Smith got charged with bank fraud for his $600,000 fraud across three companies. If your PPP application went through a bank or credit union, bank fraud charges are definatley possible.

Money laundering under 18 USC 1956 gets added when you moved the fraud proceeds. Eric Upchurch laundered $19,000 by purchasing Bitcoin. Sharon Johnson pled guilty to both wire fraud AND money laundering. That transfer from your bank account to crypto, to a car purchase, to real estate, any movement of the funds can trigger additional money laundering charges on top of the underlying fraud.

Conspiracy charges under 18 USC 371 apply when multiple people work together. The Thomas Smith case involved a five-person conspiracy spanning Milwaukee and Chicago. Each conspirator can be held liable for the full amount of the scheme, not just there individual take. If you had a business partner, accountant, or loan preparer who helped with fraudulent applications, you could both face conspiracy charges.

What Wisconsin PPP Fraud Sentences Actually Look Like

Forget the 30-year maximums that prosecutors throw around. Heres what judges in Wisconsin are actualy handing down:

Thomas Smith from Pewaukee got the longest sentence weve seen in Wisconsin for PPP fraud: 57 months in federal prison. He fraudulently obtained over $1.2 million through applications for eight different companies, lying about payroll expenses on each one. U.S. District Judge Brett H. Ludwig sentenced him. What made his case worse was that he led a five-person conspiracy and directed his co-conspirators to funnel portions of the funds to him for personal expenses.

Eric Upchurch from Madison got 28 months after being convicted at trial in June 2024. He stole $406,211 and attempted to steal another $400,378 by submitting 14 fraudulent PPP applications. His companies included Opportunity Inc., Economic Empowerment Wisconsin, and Young Gifted and Black. The jury didnt buy his defense. What really hurt him was that he purchased $19,000 in Bitcoin with fraud proceeds, which the government used as evidence of money laundering.

Sharon Johnson got the lightest sentence at 3 months in prison for her $109,733 fraud. She pled guilty to wire fraud and money laundering. The difference? She cooperated, pled guilty, and her fraud amount was relativley small compared to others. She still owes $109,733 in restitution on top of the prison time.

The pattern is clear: sentences in Wisconsin range from 3 months to 57 months based on fraud amount, whether you went to trial, whether you led a conspiracy, and how you spent the money.

The $10.8 Million Corporate Settlement: Why Legitimate Businesses Get Caught

In 2025, a group of affiliated companies paid $10,853,246.94 to settle allegations that they violated the False Claims Act. These werent fly-by-night fraudsters. They were established businesses: Barrington Venture Holding Company, The Club at Strawberry Creek, The Garlands of Barrington, Nuestro Queso, SSCO, and Tire Profiles. So what did they do wrong?

The PPP program had a rule that most business owners didnt understand. Companies with more than 500 employees couldnt get PPP loans. But the rule applied across affiliated companies. If you had multiple businesses under common ownership or control, you had to add up ALL the employees across ALL the businesses. These six affiliated companies collectively employed more than 500 people, making them ineligable.

The government alleged that they “knew that they were ineligible for the PPP loans that they recieved but that they applied anyway and took affirmative steps to avoid detection by regulators.” Collectively, they recieved six PPP loans totaling over $5 million in principal. The settlement was more than double there loan amounts.

This isnt criminal prosecution. Its civil enforcement under the False Claims Act, which allows the government to recover treble damages plus penalties. But it shows that even legitimate businesses who thought they qualified can face massive liability. If you have affiliate companies, subsidiaries, or related entities, you may have exposure you dont realize.

The Wild 100s Gang Case: How PPP Fraud Connects to Other Crimes

Heres something the other law firms wont mention: a Milwaukee street gang called the Wild 100s used pandemic fraud to fund violent crime. Thirty gang members got charged. The fraud proceeds went toward murder-for-hire, firearms purchases, controlled substances, jewelry, and vacations. Two members, Ronnell Bowman and Ronnie Jackson, are accused of arranging and executing a murder using fraud proceeds.

Why does this matter for your case? Because prosecutors use PPP fraud to build bigger cases. If your under investigation for PPP fraud and you have any connection to other criminal activity, the fraud charges become a gateway to much more serious prosecution. The sentencing enhancements for fraud connected to violent crime are severe.

Even if your not in a gang, this case shows how prosecutors think. They trace were the money went. They look at who you asociated with. They examine wheather the fraud was part of a larger criminal enterprise. Fraud charges that seem isolated can become part of a much bigger case.

Bitcoin Purchases as Money Laundering Evidence

Eric Upchurch made a critical mistake: he used $19,000 of his PPP fraud proceeds to buy Bitcoin. That purchase became the foundation of his money laundering conviction. Heres why crypto purchases are so dangerous for PPP fraud defendants:

First, cryptocurrency exchanges have records. Coinbase, Kraken, and other exchanges are regulated and cooperate with federal investigators. Every deposit from your bank account to your crypto wallet is logged and traceable. If your bank recieved PPP funds and you transferred money to crypto, that transaction history is available.

Second, crypto purchases prove intent. PPP loans were supposed to go toward payroll and business expenses. Buying speculative investments like Bitcoin shows you never intended to use the money for its stated purpose. Its direct evidence that you knew the loan was fraudulent.

Third, money laundering charges add prison time. Upchurch faced 10 years maximum on the money laundering count alone, on top of 20 years for each fraud count. Even if the laundering amount was only $19,000, the charge stacks on top of everything else.

If you bought crypto with PPP funds, investigators can see it. Exchanges report to FinCEN. Your transaction history is not private.

How Federal Prosecutors Build PPP Fraud Cases in Wisconsin

Understanding how they catch people helps you understand your own exposure. Heres what investigators do:

First, they compare your PPP application to your tax returns. Eric Upchurch “falsely claimed that his businesses earned hundreds of thousands of dollars in revenue, and paid employees tens of thousands of dollars in payroll per month.” The IRS has records of what you actualy reported. When your PPP application claims payroll that dosnt match your tax filings, thats a red flag.

Second, they verify wheather you had real employees. Upchurch’s companies had “no formal employees beyond himself” and lacked “sufficient revenue to justify the claimed payroll expenses.” The government can subpoena payroll records, W-2s, and unemployment insurance records to verify wheather your stated employees actualy existed.

Third, they trace were the money went. Thomas Smith “directed his co-conspirators to send him portions of the PPP funds within days of recieving them and used the proceeds for personal expenses.” Rapid transfers to personal accounts, crypto purchases, luxury items, all of this shows the money wasnt used for legitimate business purposes.

Fourth, they look at patterns across multiple applications. Upchurch submitted 14 applications. Thomas Smith submitted applications for 8 companies. Multiple fraudulent applications show a deliberate scheme, not an honest mistake.

Defense Strategies That Actually Work

OK so your facing an investigation or charges in Wisconsin. What can actualy help you?

The biggest defense is lack of intent. The government has to prove you KNEW your statements were false and you INTENDED to defraud. If you genuinley believed your payroll calculations were accurate, if you relied on records your bookkeeper gave you, if you thought you understood the eligibility rules correctly, thats a defense.

The PPP program was confusing. Rules changed constantly. SBA guidance was contradictory. The affiliate rule that caught those six companies paying $10.8 million? Alot of legitimate business owners didnt understand it. Honest confusion isnt fraud.

Good faith reliance on professionals matters too. If your CPA prepared the application, if a loan officer told you what numbers to use, if you followed advice from someone you reasonably trusted, the government has to show you knew there advice was wrong.

Cooperation can dramaticly reduce your sentence. Sharon Johnson got 3 months. Thomas Smith got 57 months. Part of that difference is that Johnson cooperated and pled guilty while Smith was convicted after leading a conspiracy. Early cooperation with prosecutors can result in sentence reductions under the federal sentencing guidelines.

Going to trial is risky. Eric Upchurch took his case to trial and lost after three days. The conviction rate in federal court exceeds 90%. If you have a winnable case, trial might make sense. But if the evidence is strong, a negotiated plea usualy results in a shorter sentence then trial.

Can You Still Be Prosecuted for a 2020 PPP Loan?

Yes. Absolutley yes. The Badger Project reported that federal prosecutors “told The Badger Project they’ll continue prosecuting these cases” well into 2025 and beyond.

In 2022, Congress extended the statute of limitations to 10 years for PPP fraud. Applications from 2020 can be prosecuted through 2030. Applications from 2021 can be prosecuted through 2031.

And the clock starts when you made your last false statement. If you submitted a forgivness application with false certifications, the clock starts then. Every false certification resets your exposure window.

The Upchurch conviction came in June 2024 for conduct between April 2020 and April 2021. Thats more than three years after the fraudulent applications. The government has time on there side.

What to Do If Federal Agents Contact You

Do not talk to federal agents without an attorney present. Period.

FBI agents, IRS Criminal Investigation, SBA-OIG, whoever shows up, your not required to speak with them. You have a Fifth Amendment right to remain silent. Use it.

Be polite. Take there card. Say you need to speak with a lawyer first. Thats it.

In Wisconsin specifically, know that both the Eastern and Western Districts have active PPP fraud investigations. The agencies work together. IRS-CI, FBI, SBA-OIG, and FDIC-OIG all collaborated on Wisconsin cases. When you talk to one agent, youre creating evidence that all of them can use.

If you recieve a grand jury subpoena for documents, you generaly have to comply. But you dont have to testify without immunity. A federal criminal defense lawyer can negotiate the terms of your cooperation.

Why You Need a Federal Criminal Defense Lawyer

PPP fraud is federal. The loans came from the Small Business Administration. Prosecutions happen in federal court under federal rules with federal judges who follow federal sentencing guidelines.

State criminal defense attorneys might not know federal discovery rules, federal sentencing guidelines, or how to negotiate with Assistant U.S. Attorneys in Milwaukee or Madison. Federal court is a completley different system. The conviction rate exceeds 90%.

In Wisconsin specifically, you need someone who knows wheather your case will be in the Eastern or Western District. Who has relationships with prosecutors in both U.S. Attorney offices. Who understands how cases move through federal court in Milwaukee versus Madison.

The sentencing guidelines are complicated. Your sentence depends on loss amount, criminal history, wheather you led a conspiracy, wheather you went to trial, how you spent the money, and dozens of other factors. Thomas Smith got 57 months. Sharon Johnson got 3 months. The difference wasnt just about the amounts. It was about cooperation, role in the offense, and how the cases were handled from the beginning.

If your facing PPP fraud allegations in Wisconsin, your facing potential prison time, tens of thousands or millions in restitution, and a felony record that follows you forever. Nearly 40 people in Wisconsin have already been charged. The investigations are ongoing. This isnt the time to hope they dont find you. Contact a federal criminal defense lawyer who handles white collar cases in Wisconsin. Act now.