South Carolina PPP Loan Fraud Lawyers: Federal Defense in Charleston and Columbia

South Carolina PPP Loan Fraud Lawyers: Federal Defense in Charleston and Columbia

You received a letter from the SBA Office of Inspector General. Or maybe an FBI agent called asking to “discuss your PPP loan.” Your probably wondering whether this is serious, whether you need an attorney, and what happens next. The short answer: yes, its serious, and you need experienced federal defense counsel immediantly.

PPP fraud investigations in South Carolina have accelerated dramatically since 2021. The US Attorney’s Office in both Charleston and Columbia has made COVID-19 relief fraud a top prosecutorial priority. What might of seemed like a minor application error or a good-faith misunderstanding can quickly escalate into federal bank fraud charges carrying decades in prison.

This article explains what your facing if your under investigation or have been charged with PPP loan fraud in South Carolina. We’ll cover the specific federal statutes prosecutors use, how investigations unfold in the Charleston and Columbia federal courts, and—most importantly—what you can do to protect yourself right now.

Understanding PPP Fraud Charges in South Carolina

The Paycheck Protection Program was designed to help buisnesses survive the pandemic. But the program’s rapid rollout, constantly changing guidance, and minimal oversight created a enviroment where honest mistakes could look like deliberate fraud. Prosecutors don’t always distinguish between the two.

In South Carolina, PPP fraud prosecutions typically involve three federal statutes:

18 U.S.C. § 1343 – Wire Fraud: This charge applies when you submitted your PPP application electronically or communicated with lenders via email. Wire fraud carries up to 20 years in federal prison. However the statute of limitations is normally five years—unless the fraud affected a financial institution, in which case it extends to ten years. This distinction matters because prosecutors sometimes overcharge wire fraud counts that should be time-barred.

18 U.S.C. § 1344 – Bank Fraud: Since PPP loans went through SBA-approved lenders, prosecutors routinely charge bank fraud. The maximum penalty is 30 years and a $1 million fine. Bank fraud requires proof that you knowingly executed or attempted to execute a scheme to defraud a financial institution. The government must show you intended to deceive the bank—negligence or mistakes ain’t enough.

18 U.S.C. § 1014 – False Statements to SBA: Making a false statement on a loan application to the Small Business Administration is a seperate crime. Prosecutors like this charge because it requires less proof then fraud charges. They only need to show the statement was false and material to the loan decision. You don’t even need to have recieved the money—the act of submitting a false application is the crime.

Here’s the thing: the US Attorney’s Office in South Carolina doesn’t prosecute every PPP loan irregularity. They prioritize cases based off several factors:

• Loan amounts over $150,000 (larger loans get more scrutiny)
• Multiple applications across related businesses without proper affiliation analysis
• Evidence of falsified documents (fake tax returns, forged payroll records)
• Use of loan proceeds for personal expenses rather then business costs
• Professional facilitators who helped prepare multiple fraudulent applications

If your case involves one or more of these factors, your risk of criminal prosecution increases substancially. But—and this is crucial—even smaller loans can result in charges if prosecutors believe they can prove deliberate intent to defraud.

How PPP Investigations Work in Charleston and Columbia

Most South Carolina defendants don’t realize they’re under investigation until it’s nearly over. The process usually unfolds like this:

Stage 1: SBA Automated Review (Month 1-3)

The SBA uses algorithms to flag potentially fraudulent applications. Common triggers include multiple applications from the same IP address, business formation dates within weeks of the loan application, employee counts that don’t match industry norms, and missing or invalid Employer Identification Numbers.

These flags generate an internal referral to the SBA Office of Inspector General. At this stage, you typically don’t know your under review.

Stage 2: OIG Investigation (Month 4-12)

SBA OIG investigators examine your loan file more closely. They may pull your tax returns, cross-reference payroll tax deposits with the IRS, and compare your application to publicly available buisness data. If they identify potential fraud, they send you a “request for information” letter asking for documentation.

This letter is your first warning. Many South Carolina business owners make a critical mistake here: they respond without counsel, trying to “explain” the situation. These responses frequently become evidence in criminal prosecutions. (Trust me on this.)

Stage 3: FBI Involvement (Month 12-18)

If the OIG investigation reveals possible criminal conduct, they refer the case to the FBI and the US Attorney’s Office. FBI agents conduct additional investigation, which may include interviewing your accountant, your bank, your employees, and your business partners.

This is also when prosecutors convene a grand jury. In South Carolina’s federal district, grand juries sit in Charleston, Columbia, and occasionally Florence or Greenville. The grand jury issues subpoenas for documents and testimony. If you recieve a grand jury subpoena, you are likely either a target of the investigation or a witness against someone else.

Stage 4: Target Letter or Arrest (Month 18-24)

Eventually, prosecutors decide whether to charge you. Some defendants recieve a “target letter” informing them they are the subject of a grand jury investigation and inviting them to provide information before indictment. Others are simply arrested when a sealed indictment is unsealed.

The US Attorney’s Office in South Carolina generally offers target letters in white-collar cases where defendants have counsel and are unlikely to flee. If you get one, you have a narrow window—usually two to three weeks—to present evidence or negotiate before formal charges.

But if prosecutors believe you might destroy evidence or flee, they skip the target letter and proceed directly to indictment and arrest. I’ve seen it happen.

Common PPP Application Issues That Trigger Criminal Investigations

Not every error on a PPP application results in fraud charges. Prosecutors focus on misrepresentations that significently affected the loan decision. Based off recent South Carolina cases, these issues most commonly lead to prosecution:

Employee Count Calculation Errors

The PPP loan amount was based on average monthly payroll costs. Many applicants miscalculated employee counts by including independent contractors, part-time workers at full-time equivalents, or seasonal employees irregardless of actual hours worked.

However, calculating employee counts was genuinely confusing in March and April 2020. The SBA issued conflicting guidance, and even accountants disagreed on methodology. If you relied on professional advice and disclosed accurate payroll data, prosecutors may struggle to prove you knowingly made a false statement.

Revenue and Payroll Cost Methodology

Applicants were supposed to use specific formulas to calculate average monthly payroll costs. Some used gross payroll instead of qualified payroll costs. Others included owner compensation exceeding the $100,000 cap. Still others annualized partial-year data incorrectly.

These calculation errors can appear fraudulent, but they often reflect misunderstanding rather then criminal intent. The key question: did you provide accurate underlying financial data, or did you fabricate numbers to inflate your loan amount?

Multiple Applications for Related Businesses

This is where alot of South Carolina business owners get into trouble. If you own multiple LLCs or corporations, you may have applied for a seperate PPP loan for each entity. Whether this was legal depends on SBA affiliation rules under 13 CFR § 121.301.

Businesses are “affiliated” if one controls the other, or if they have common ownership that gives a person or entity control. Affiliated businesses must be treated as a single entity for PPP purposes, meaning they share one loan calculated based on the combined payroll of all affiliates.

However the affiliation analysis is highly technical. Common ownership alone doesn’t create affiliation if the businesses operate independently, have seperate management, maintain distinct customer bases, and lack integrated operations. Many legitimate multi-entity business structures qualify for multiple loans.

Prosecutors in Charleston and Columbia frequently mischaracterize legitimate multiple-entity applications as fraud schemes. If you can document that your businesses met the SBA’s independence criteria, you have a strong defense—but you need counsel who understands these regulations.

Business Formation Date vs. Application Date

The SBA’s algorithms flag applications where the business was formed shortly before the loan application. In some cases, prosecutors allege defendants created shell companies specifically to obtain PPP loans.

But there’s a legitimate explanation in many cases: businesses formed in late 2019 or early 2020 were genuinely operational when the pandemic hit. They incurred real payroll costs and qualified for relief. The formation date alone doesn’t prove fraud—prosecutors must show the business was a sham with no real operations.

Inconsistencies Between PPP and EIDL Applications

Many South Carolina business owners applied for both PPP loans and Economic Injury Disaster Loans (EIDL). Prosecutors love these cases because they can compare the two applications. If you reported different employee counts, revenue figures, or business expenses on the two applications, prosecutors argue this proves you lied on at least one.

However EIDL and PPP applications used different calculation methodologies and time periods. Variations between the two aren’t automatically fraudulent. Your attorney needs to explain why the differences exist and whether they reflect different reporting requirements rather then false statements.

Loan Forgiveness Application Contradictions

The PPP loan could be forgiven if you spent the proceeds on qualified expenses (payroll, rent, utilities) during the covered period. To obtain forgiveness, you submitted additional documentation showing how you used the funds.

If your forgiveness application contradicts your original loan application—for example, showing fewer employees than you claimed initially—prosecutors treat this as proof of original fraud. The theory: once you got the money, you couldn’t maintain the lie when submitting actual payroll records.

Forgiveness applications create a second opportunity for fraud charges. Some defendants who made errors on their original applications compounded the problem by submitting inaccurate forgiveness documentation. If your under investigation, the forgiveness application may be more damaging then the original loan application.

Criminal Intent: The Difference Between Mistakes and Fraud

Here’s what most people don’t understand: federal fraud charges require proof of criminal intent. Negligence isn’t enough. Mistakes aren’t crimes. The government must prove you knowingly and willfully made false statements with the intent to defraud.

This element—called mens rea in legal terms—is often the weakest part of the prosecution’s case. Demonstrating intent is difficult when the defendant relied on professional advice, operated under ambiguous guidance, or made calculation errors without fabricating documents.

Good Faith Reliance on Professional Advice

If you hired an accountant, attorney, or loan consultant to prepare your PPP application, and you provided them with complete and accurate financial information, you may have an advice-of-counsel defense. The theory: you relied on a professional’s expertise and believed your application was accurate.

This defense requires contemporaneous documentation. You need emails showing what information you provided, questions you asked, and guidance you recieved. You can’t just claim you relied on an accountant’s advice—you have to prove it.

I’ve seen this defense work in Columbia’s federal court when defendants could show they disclosed everything to their preparer and followed their advice. However it fails when defendants withheld information, directed the preparer to use specific numbers, or ignored warnings about questionable claims.

SBA Guidance Ambiguities in Spring 2020

The PPP program launched with extraordinary speed. The SBA issued guidance that contradicted the statute, published FAQs that changed daily, and provided answers that differed based off who you asked. Loan officers at different banks interpreted requirements differently.

Defendants who applied in March or April 2020 can argue they operated in good faith under genuinely ambiguous guidance. What seemed like the right interpretation at the time may look questionable now, but that doesn’t make it criminal fraud.

Conversely, defendants who applied in late 2020 or 2021 face tougher scrutiny. By then, the guidance had crystalized, and there was less excuse for errors.

Evidence That Demonstrates Mistake vs. Intent

Prosecutors build intent through circumstantial evidence. Red flags include:

• Forged documents (fake tax returns, altered bank statements)
• Shell companies with no real operations
• Luxury purchases immediately after recieving loan proceeds
• Lies during investigative interviews
• Attempts to conceal evidence or obstruct investigation

If none of these factors exist in your case—if you used real business documents, spent the money on business expenses, and cooperated with investigators—the government’s intent case is weaker. The question becomes whether calculation errors or methodology disputes cross the line into criminal fraud.

What to Do If You Recieve an SBA OIG Letter

Many PPP investigations begin when defendants recieve a letter from the SBA Office of Inspector General. The letter typically says the OIG is “reviewing your loan” and requests documentation like tax returns, payroll records, bank statements, and cancelled checks.

Your response to this letter may determine whether you face criminal charges. Here’s what you need to know:

Do Not Respond Without Legal Counsel

Look, I can’t stress this enough: do not respond to an OIG letter without hiring an attorney who handles federal criminal defense. The letter may seem administrative, like the SBA just needs clarification. That’s not what’s happening.

The OIG is conducting a fraud investigation. Anything you write in response can and will be used against you in a criminal prosecution. I’ve seen defendants provide explanations that seemed reasonable at the time but became the centerpiece of the government’s case.

The Critical 30-60 Day Window

OIG letters typically request a response within 30 to 60 days. This window represents your best opportunity to intervene before criminal referral. But you need to use it strategically.

An experienced attorney can assess whether responding is advisable or whether invoking Fifth Amendment protections makes more sense. In some cases, providing documentation helps clarify misunderstandings and avoid criminal charges. In other cases, responding merely gives prosecutors additional evidence.

Voluntary Repayment Options

One strategy: offer to repay the PPP loan in full before criminal charges are filed. Voluntary repayment doesn’t eliminate criminal exposure, but it demonstrates good faith and removes the government’s financial loss—making prosecution less appealing.

The US Attorney’s Office in South Carolina has resolved some cases administratively when defendants repaid quickly and demonstrated the error was unintentional. However this approach requires careful negotiation. You don’t want to repay the loan and still face criminal charges.

Administrative Resolution vs. Criminal Referral

The SBA OIG has authority to resolve cases administratively through civil penalties, loan repayment, and debarment from future government programs. This outcome is far better then criminal prosecution.

Early intervention by counsel can sometimes keep cases in the administrative track instead of criminal referral. But once the OIG refers your case to the FBI and US Attorney’s Office, the opportunity for administrative resolution usually closes.

Federal Court Proceedings in Charleston and Columbia

If your charged with PPP fraud in South Carolina, your case will be prosecuted in the US District Court for the District of South Carolina. The district has courthouses in several cities, but most PPP fraud cases are handled in Charleston or Columbia.

Charleston Division – J. Waties Waring Federal Building

The Charleston courthouse at 83 Meeting Street handles cases originating in the coastal and Lowcountry regions. If you live in Charleston, Mount Pleasant, Beaufort, Hilton Head, or surrounding areas, your case likely proceeds here.

Charleston juries tend to be more diverse demographically and include a mix of business owners, professionals, retirees, and service industry workers. The city’s commercial culture means jurors generally understand business operations, but they also take fraud seriously.

Columbia Division – Matthew J. Perry Jr. Courthouse

The Columbia courthouse at 1441 Main Street handles the central part of the state. Columbia is the state capital, and the jury pool includes alot of government employees, university personnel, and professionals.

In my experiance, Columbia juries can be more skeptical of business defendants, particularly if the government frames the case as stealing from taxpayers. However they also understand that government programs are complex and mistakes happen.

Initial Appearance and Detention Hearing

If your arrested on a PPP fraud indictment, you’ll appear before a magistrate judge within 24 hours for an initial appearance. The magistrate will inform you of the charges, appoint counsel if you qualify, and determine whether you’ll be detained or released pending trial.

Most PPP fraud defendants are released on bond. These are typically non-violent, white-collar cases involving defendants with community ties. However high-dollar cases, multi-defendant conspiracies, or evidence of flight risk can result in detention.

Discovery Process

After arraignment, the discovery phase begins. The government must provide all evidence it plans to use at trial, as well as any exculpatory evidence that might help your defense. In PPP cases, discovery typically includes:

• Your complete SBA loan file
• Bank records showing loan deposits and expenditures
• IRS records (tax returns, payroll tax deposits)
• Recorded interviews with witnesses
• Email communications related to the loan application
• Expert analysis of financial records

Reviewing discovery carefully often reveals weaknesses in the government’s case. For instance, if the SBA approved your loan despite red flags in the application, this suggests they didn’t view the information as fraudulent at the time.

Plea Negotiations

Most federal criminal cases resolve through plea agreements rather then trial. The US Attorney’s Office may offer to reduce charges, dismiss counts, or recommend a lower sentencing range in exchange for a guilty plea.

Whether to accept a plea offer depends on the strength of the evidence, the potential trial sentence if convicted, and your tolerance for risk. Some PPP fraud cases are strong for the government—forged documents, obvious lies, personal use of funds. Others are genuinely defensible—methodology disputes, good faith errors, reliance on advice.

An experienced attorney can assess your case realistically and advise whether fighting charges or negotiating a plea makes more sense for your situation.

Potential Penalties for PPP Fraud Convictions

Federal sentencing is governed by the US Sentencing Guidelines, which calculate a recommended sentence range based on the offense severity and your criminal history. While the guidelines are advisory (not mandatory), judges in South Carolina generally follow them unless there are compelling reasons to vary.

Base Offense Level Calculation

Fraud sentences start with a base offense level determined by the loss amount. For PPP fraud, the “loss” is typically the loan amount obtained (or attempted) through fraud:

• Loss under $6,500: Level 6
• $6,500 – $15,000: Level 8
• $15,000 – $40,000: Level 10
• $40,000 – $95,000: Level 12
• $95,000 – $150,000: Level 14
• $150,000 – $250,000: Level 16
• $250,000 – $550,000: Level 18
• $550,000 – $1.5 million: Level 20

Higher amounts increase the level further. A $2 million PPP fraud starts at level 22.

Sentencing Enhancements

The base level increases if certain aggravating factors exist:

Sophisticated Means (+2 levels): Prosecutors routinely argue PPP fraud involved “sophisticated means” because it required understanding SBA regulations, creating business documents, and navigating the lending process. Courts have split on whether this enhancement applies to typical PPP cases.

Abuse of Trust (+2 levels): If you held a position of trust that facilitated the fraud—for example, a CPA who prepared fraudulent applications for clients—this enhancement applies.

Number of Victims (+2 to +6 levels): If the fraud involved 10 or more victims, additional levels apply. In PPP cases, prosecutors sometimes argue multiple victims (the SBA, the lending bank, taxpayers), but courts have generally rejected this theory for single-loan cases.

Acceptance of Responsibility Reduction

If you plead guilty and accept responsibility for your conduct, you can recieve up to a 3-level reduction. This significantly lowers the guideline range. However, you don’t get this reduction if you go to trial and lose.

Typical South Carolina Sentences

Based off recent PPP fraud sentences in the District of South Carolina:

• Loans under $50,000 with acceptance of responsibility: Probation to 12 months
• Loans $50,000-$150,000: 12-24 months
• Loans $150,000-$500,000: 24-48 months
• Loans over $500,000 or multi-defendant schemes: 48-84 months

These are generalizations. Actual sentences depend on specific facts, criminal history, and whether you cooperate with prosecutors.

Mandatory Restitution

If convicted, you must pay restitution equal to the loss amount. This is separate from any criminal fine. If you obtained a $200,000 PPP loan fraudulently, you’ll owe $200,000 in restitution regardless of your ability to pay.

Restitution obligations survive bankruptcy and can be enforced through wage garnishment, asset seizure, and liens. The government will pursue this money aggresively.

Criminal Fines

In addition to restitution, the court can impose criminal fines up to $250,000 per count (or twice the gain/loss amount, whichever is greater). In practice, judges often waive or minimize fines when restitution amounts are high and defendants lack ability to pay.

Professional License Consequences

A federal fraud conviction affects professional licenses in South Carolina. If you hold a contractor license, real estate license, CPA certification, or healthcare provider credentials, expect disciplinary proceedings that may result in suspension or revocation.

Additionally, a fraud conviction bars you from participating in federal programs and contracts. If your business relies on government contracts, Medicare/Medicaid reimbursement, or SBA loans, a conviction effectively ends that revenue stream.

Defense Strategies for PPP Fraud Cases

Defending PPP fraud charges requires understanding both the substantive law (what constitutes fraud) and the procedural opportunities (when to fight, when to negotiate). Effective strategies include:

Lack of Criminal Intent

The strongest defense in many PPP cases: you made errors, but you didn’t intend to defraud anyone. You believed your application was accurate based on the information you had and the guidance available at the time.

This defense works best when you can show you relied on professional advice, disclosed all relevant information to your lender, and used loan proceeds for business purposes. It fails when evidence shows deliberate lies, fabricated documents, or personal use of funds.

Advice of Counsel

If an attorney or accountant prepared your application, and you provided them with complete and accurate information, you can argue you lacked the intent to commit fraud. The professional’s involvement suggests you sought to comply with the law.

However this defense requires waiving attorney-client privilege to allow the professional to testify about your interactions. In some cases, the professional may refuse to testify or may provide evidence that hurts rather then helps your defense.

SBA Approval Despite Red Flags

If the SBA reviewed your application and approved it despite information that now seems problematic, this undermines the government’s case. Why would the SBA fund your loan if they considered the application fraudulent?

Discovery should include all SBA reviewer notes and approval documentation. Sometimes reviewers flagged issues but approved the loan anyway, suggesting they didn’t view the information as material misrepresentations.

Statute of Limitations Challenges

Wire fraud charges must be filed within five years of the offense (or ten years if affecting a financial institution). If your PPP application was submitted in April 2020 and you weren’t charged until May 2025, your attorney should examine whether the statute of limitations bars some counts.

Courts have split on whether PPP fraud automatically “affects a financial institution” to trigger the longer limitations period. This is a technical argument, but it can result in dismissal of counts.

Insufficient Evidence of Materiality

Even if you made a false statement, it’s only fraud if the statement was “material”—meaning it influenced the lender’s decision. If the lender would have approved your loan anyway, the false statement wasn’t material.

For example, if you overstated employee count by two people but would have qualified for the same loan amount with the correct count, the overstatement arguably wasn’t material. This defense is fact-specific and depends on the exact nature of the misrepresentation.

Pre-Indictment Intervention

Sometimes the best defense happens before charges are filed. If you learn your under investigation early—from an OIG letter or FBI contact—your attorney may be able to present evidence of good faith, offer restitution, and persuade prosecutors to decline charges.

This requires sophisticated advocacy and relationships with the US Attorney’s Office. It doesn’t work in every case, but when it does, it’s far better then fighting charges after indictment.

Cooperation Agreements and Plea Negotiations

In multi-defendant PPP fraud cases, prosecutors often offer cooperation agreements to lower-level participants. These agreements—sometimes called “substantial assistance” departures—can significently reduce your sentence if you provide information against co-defendants or other fraudsters.

What Prosecutors Want

The government typically seeks cooperation from defendants who can testify about:

• Professional facilitators (accountants, loan brokers) who prepared multiple fraudulent applications
• Kickback schemes where loan proceeds were shared with conspirators
• Other individuals who obtained fraudulent PPP loans
• Money laundering or other criminal conduct related to the fraud

If you have information about higher-value targets, your cooperation is more valuable and results in better sentencing concessions.

Proffer Agreements

Before committing to cooperation, defendants often participate in a “proffer” or “Queen for a day” session. You meet with prosecutors and investigators, tell them what you know, and they evaluate whether your information is useful.

Proffer agreements provide limited immunity—your statements during the proffer can’t be used against you in the government’s case-in-chief, but they can be used for impeachment if you testify differently at trial. This protection is valuable but not absolute.

Substantial Assistance Departures

If you provide substantial assistance to the government, prosecutors can file a motion under USSG § 5K1.1 asking the court to sentence you below the guideline range. The extent of the departure depends on the value of your cooperation.

I’ve seen defendants who faced 60+ months receive probation based on substantial assistance. But this requires providing truthful, valuable information and testifying at trial if necessary.

Risks of Cooperation

Cooperation isn’t without risk. You’re committing to testify against co-defendants, which may expose you to retaliation. You’re also locked into your story—if prosecutors later believe you lied during cooperation, they can charge you with additional crimes and revoke any sentencing benefits.

Additionally, cooperation doesn’t guarantee a favorable outcome. The government may accept your cooperation but still recommend a substancial sentence based on your role in the offense.

When Cooperation Makes Sense

Cooperation is most advantageous when:

• You were a minor participant in a larger scheme
• You have information about more culpable defendants
• The evidence against you is overwhelming and trial isn’t realistic
• You’re willing to testify and can do so credibly

Cooperation makes less sense when you’re the primary target, when you don’t have information about others, or when the government’s case against you is weak and trial is a viable option.

Protecting Your Assets During Investigation and Prosecution

PPP fraud investigations threaten not just your liberty but your financial security. The government can seize assets even before conviction through restraining orders and civil forfeiture. You need to protect what you can while avoiding additional criminal exposure.

Pretrial Asset Restraining Orders

When the government indicts you for fraud, they often seek a restraining order freezing assets equal to the alleged fraud proceeds. This prevents you from dissipating or transferring property before trial.

Restraining orders can freeze bank accounts, real estate, vehicles, and business assets. If the court grants the order, you may struggle to pay for living expenses or legal representation. You can petition the court to release funds for attorneys’ fees and reasonable living expenses, but this requires demonstrating that the frozen assets are not traceable to fraud proceeds.

Fraudulent Transfer Concerns

Transferring assets to family members or business partners during investigation creates additional legal problems. If prosecutors believe you’re hiding assets to avoid forfeiture, they can charge obstruction of justice or money laundering.

Courts will void “fraudulent transfers” made with intent to hinder collection of fines, restitution, or forfeiture. Transfers made after you knew about the investigation are highly suspect. Even legitimate transactions may be scrutinized and reversed.

Criminal Forfeiture Process

If convicted, the government will seek criminal forfeiture of any property derived from or used to commit the fraud. This includes the PPP loan proceeds and any assets purchased with those funds.

The forfeiture process allows third parties (such as your spouse or business partners) to claim interests in the property. If you can show that certain assets weren’t purchased with fraud proceeds, they may be exempt from forfeiture.

Business Continuity Planning

If you’re a business owner facing PPP fraud charges, you need a plan to keep your business operating during prosecution. This may involve:

• Delegating management to partners or employees
• Segregating business accounts from personal accounts
• Maintaining meticulous financial records to demonstrate legitimate business operations
• Consulting with a business attorney about succession planning in case of conviction

Some defendants are able to maintain their businesses even during prosecution, particularly if they’re released on bond and the business operations are unrelated to the charges. However professional licenses, government contracts, and financing may be jeopardized.

Why Local South Carolina Federal Defense Counsel Matters

PPP fraud is a federal crime prosecuted in federal court, but local knowledge matters. An attorney who regularly practices in Charleston and Columbia federal courts brings advantages you can’t get from out-of-state counsel or a general criminal defense lawyer.

Familiarity with Local Prosecutors

The Assistant US Attorneys handling PPP fraud cases in South Carolina have specific priorities, negotiation styles, and track records. An attorney who knows these prosecutors understands what arguments resonate, what evidence they value, and when they’re willing to negotiate vs. proceed to trial.

This familiarity facilitates productive plea negotiations and helps calibrate your expectations realistically. It doesn’t guarantee a favorable outcome, but it eliminates surprises and allows strategic planning.

Understanding Local Judges

The federal judges in Charleston and Columbia have different sentencing philosophies, tolerance for certain arguments, and procedural preferences. Some judges are more skeptical of fraud defendants; others are more willing to consider mitigating factors.

Local counsel knows which judges handle criminal cases, how they’ve sentenced similar PPP fraud defendants, and what presentation style works in their courtroom. This knowledge shapes how your case is presented and what outcomes are realistic.

Experience with SBA OIG Negotiations

The SBA Office of Inspector General handles PPP fraud investigations before criminal referral. Attorneys who have negotiated with the OIG understand what documentation they require, what explanations they accept, and when cases can be resolved administratively.

This experience is critical during the pre-indictment phase when intervention can potentially avoid criminal charges altogether.

Federal Criminal Defense Experience

Federal criminal defense is a specialized practice. The rules, procedures, and strategies differ substantially from state court criminal defense. PPP fraud cases involve complex financial evidence, expert witnesses, and federal sentencing calculations that require specific expertise.

When evaluating attorneys, look for:

• Admission to practice in the US District Court for the District of South Carolina
• Experience handling federal fraud cases (not just state crimes)
• Track record of successful outcomes in white-collar prosecutions
• Relationships with forensic accountants and financial experts
• Trial experience in federal court

Fee Structures and Costs

Federal fraud defense is expensive. Attorneys typically charge $250-$500 per hour or offer flat fees for specific phases of representation. For a PPP fraud case, expect legal fees of:

• Pre-indictment intervention: $15,000-$30,000
• Plea negotiation and sentencing: $25,000-$50,000
• Trial preparation and trial: $50,000-$150,000+

These figures vary based on case complexity, the amount of discovery, and whether expert witnesses are needed. Some attorneys offer payment plans or accept retainers with monthly billing.

Public defenders are available only if you qualify financially (typically income below 125% of federal poverty guidelines). Most business owners charged with PPP fraud won’t qualify because their income or assets exceed the thresholds.

Taking Action When You’re Under Investigation

If you’ve recieved an SBA OIG letter, been contacted by FBI agents, or learned your under investigation for PPP fraud, time is critical. The actions you take in the next few days and weeks may determine whether you face criminal charges and, if so, the strength of the government’s case.

Immediate Steps to Take

1. Do not communicate with investigators without counsel. Politely decline to answer questions and state that you wish to speak with an attorney first. Do not try to “explain” or “clarify” anything—no matter how innocent it seems.

2. Preserve all documents related to your PPP loan. This includes the loan application, supporting documentation, bank records, payroll records, tax returns, communications with your lender, and any correspondence with the SBA. Do not alter or destroy any documents.

3. Contact a federal criminal defense attorney immediately. Do not wait to see what happens. The earlier an attorney gets involved, the more options you have. Pre-indictment intervention is far more effective then post-indictment damage control.

4. Do not discuss the investigation with anyone except your attorney. Don’t talk to business partners, employees, family members, or friends about the investigation. These conversations are not privileged and can be discovered by prosecutors.

5. Identify all documents and communications related to your loan application. Make a list of who prepared the application, what information you provided, what guidance you recieved, and how you used the loan proceeds. This information will be critical for your attorney’s evaluation.

What to Expect in Your Initial Consultation

When you meet with a federal defense attorney, come prepared to discuss:

• The nature of the investigation (OIG letter, FBI contact, grand jury subpoena)
• Details of your PPP loan application (amount, date, how it was prepared)
• Your business structure and operations
• Who was involved in preparing the application
• How you used the loan proceeds
• Any communications you’ve had with investigators

The attorney will evaluate the strength of the potential case against you, explain your options, and recommend a strategy. This may involve responding to the OIG, seeking administrative resolution, preparing for indictment, or negotiating with prosecutors.

Timeline for Getting Legal Help

Don’t delay. If you’ve recieved an OIG letter with a 30-day response deadline, you need counsel within the first week to allow time for investigation and response preparation. If you’ve been contacted by the FBI, hire counsel before any follow-up contact.

Waiting until you’re indicted drastically limits your options. At that point, the government has already decided to prosecute, assembled its evidence, and presented to the grand jury. Pre-indictment intervention opportunities are gone.

Conclusion: Understanding Your Options Under Federal Scrutiny

PPP fraud investigations in South Carolina are serious, complex, and potentially life-altering. But they’re also defensible. Not every application error is criminal fraud. Not every investigation results in charges. And not every charge results in conviction or prison time.

What matters is how you respond. Hiring experienced federal counsel early, understanding the process, and making strategic decisions about cooperation, plea negotiations, and trial can significantly affect the outcome.

The US Attorney’s Office in Charleston and Columbia will continue prioritizing PPP fraud prosecutions for the forseeable future. If your under investigation or concerned about your PPP loan, the time to act is now—before the government makes charging decisions that may be difficult to reverse.

Whether you made an honest mistake, relied on professional advice, or face allegations that simply don’t reflect what actually happened, you deserve a defense that understands both the law and the local federal courts where your case will be decided.