Criminal Defense Lawyers

South Dakota PPP Loan Fraud Lawyers

South Dakota may be a small state, but federal prosecutors here take PPP loan fraud just as seriously as their counterparts in major metropolitan areas. The U.S. Attorney’s Office in Sioux Falls has demonstrated a willingness to pursue even relatively small-dollar fraud with real prison sentences. A 27-year-old who obtained $20,833 through a fake cleaning business received 18 months in federal prison. That is not a slap on the wrist for a young person with no criminal history.

What makes South Dakota prosecutions particularly instructive is the Steven Knigge case. Knigge was a 77-year-old former fraud investigator for the South Dakota Department of Revenue. He spent years investigating other people for fraud. When he submitted a fraudulent PPP application for $20,833, he received 33 months in federal prison. If a trained fraud investigator who understands exactly how these cases are built cannot escape prosecution, no one should assume they can either.

South Dakota operates as a single federal judicial district, meaning all federal cases from across the entire state funnel through the U.S. Attorney’s office in Sioux Falls. U.S. Attorney Alison Ramsdell, appointed in April 2022, oversees prosecution of federal crimes statewide. Chief Judge Roberto Lange has sentenced PPP fraud defendants to significant prison terms even for loans under $25,000. The message from the District of South Dakota is clear: fraud is fraud regardless of the dollar amount.

The James Bunker case adds another dimension to South Dakota prosecutions. Bunker faces 16 counts for allegedly defrauding both the Paycheck Protection Program and the Main Street Lending Program of over $2 million. The Main Street Lending Program is rarely prosecuted compared to PPP, making this case unusual. If convicted, Bunker could face decades in prison and would forfeit four properties in Sioux Falls plus $20,000 in cash.

If you received a PPP loan in South Dakota and are concerned about your application, this article explains what federal prosecutors are actually charging, what sentences real defendants have received, and why consulting with experienced federal defense counsel now rather than later could make a significant difference in your outcome. The wire fraud statute carries up to 20 years per count, but understanding what defendants actually receive matters more than theoretical maximums.

The Single District Dynamic

Understanding how South Dakota’s federal court system works is important becuase it affects how PPP fraud cases are prosectued. Unlike larger states that have multiple federal districts with different U.S. Attorneys, South Dakota has only one district covering the entire state. Every federal case from Sioux Falls to Rapid City to Pierre goes through the same office.

The District of South Dakota maintains division offices in Sioux Falls, Rapid City, Pierre, and Aberdeen, but they all report to U.S. Attorney Alison Ramsdell. This means there’s no variation in prosecution priorities across the state. The same standards apply wheather your case originates in the Black Hills or on the eastern plains. It also means defense attorneys need to know this specific district’s practices and the tendancies of its judges.

Chief Judge Roberto Lange has presided over several PPP fraud sentencings, and his sentences have been substancial even for relatively small fraud amounts. Steven Knigge recieved 33 months from Judge Lange for PPP fraud combined with check fraud totaling about $220,000. Joshua Booth recieved 18 months for $20,833 in fraud. These sentences indicate the court takes pandemic relief fraud seriously regardless of the amount involved.

Real Cases from South Dakota

The cases prosectued in South Dakota demonstrate that federal agents and prosecutors are actively investigating PPP fraud in the state. These are not hypothetical scenarios. These are real defendants who have been sentenced or are awaiting trial.

Steven Arthur Knigge’s case stands out becuase of his background. At age 77, Knigge had worked as a fraud investigator for the South Dakota Department of Revenue. He spent years investigating fraud by other people. Yet in April 2021, he submitted a fradulent PPP application claiming to own a residential remodeling buisness that didn’t exist. The banking and W-2 documents he submitted were completley fabricated. He recieved the $20,833 and immediatley withdrew nearly the entire amount in cash.

But the PPP fraud wasnt Knigges only crime. He also deposited seven fradulent checks totaling approximately $200,000 into accounts at Med5 Federal Credit Union, Wells Fargo Bank, Black Hills Federal Credit Union, and Highmark Federal Credit Union. He would deposit the checks and quickly transfer or withdraw funds before banks could detect the fraud. His 33-month sentence reflects the combined conduct, with restitution totaling $27,198 to multiple victims.

Joshua Booth was only 27 years old when he submitted a fradulent PPP application in May 2021 through Fountainhead, a third-party lender. He claimed to operate “Booth cleaning service” in Sioux Falls. The buisness didnt exist. He included a fake IRS Schedule C form with false income statements, knowing the documents were fradulent. He recieved the $20,833 loan and used it for personal purposes. His 18-month sentence came after he pled guilty in January 2024, having been indicted in August 2023.

James Bunker presents the most serious pending case in South Dakota. The 52-year-old Sioux Falls man faces 16 counts of fraud-related crimes connected to both the Paycheck Protection Program and the Main Street Lending Program. According to prosecutors, his fraud spanned from June 2020 through July 2021 and totaled over $2 million.

What Makes the Bunker Case Different

Most PPP fraud prosecutions involve the Paycheck Protection Program alone or sometimes PPP combined with EIDL loans. The Bunker case is unusual becuase it involves the Main Street Lending Program, which recieved far less attention from prosecutors nationaly. This suggests federal agents are expanding there focus beyond the programs most commonly associated with pandemic relief fraud.

According to the indictment, Bunker allegedly “significently underreported” his financial liabilities when applying for loans from multiple South Dakota banks. He allegedly failed to disclose a large tax lien and provided false financial statements. He also faces wire fraud charges and is accused of lying about his receipt of more then $2 million in COVID loans across various programs.

If convicted on all 16 counts, Bunker could face up to 20 years in prison on each count. While sentences are rarely stacked consecutivley to reach theoretical maximums, even a fraction of that exposure represents decades in federal prison. The government is also seeking forfeture of four properties in Sioux Falls plus $20,000 in cash. This case shows that larger fraud schemes in South Dakota face serious consequences.

Federal Charges in PPP Fraud Cases

South Dakota PPP fraud defendants typically face multiple federal charges. Understanding these charges helps you evaluate your potential exposure and why early legal intervention can be so important.

Wire fraud under 18 U.S.C. § 1343 is the most common charge becuase PPP applications were submitted electronically. Each fradulent application can be charged as a seperate count carrying up to 20 years in prison. Joshua Booth pled guilty to one count of wire fraud. James Bunker faces multiple wire fraud counts reflecting his numerous alleged fradulent applications.

Bank fraud under 18 U.S.C. § 1344 applys when defendants made false statements to financial institutions. Steven Knigge was convicted of three counts of bank fraud for his check scheme. Bank fraud carries up to 30 years in prison per count and has a 10-year statute of limitations, meaning 2020 loans remain chargeable through 2030.

Money laundering under 18 U.S.C. § 1956 comes into play when defendants moved fradulent funds in ways that concealed there origin. Knigge’s quick transfers between accounts after depositing fradulent checks resulted in three money laundering counts. Making false statements under 18 U.S.C. § 1014 covers lies in loan applications and adds another potential 30 years of exposure.

Signs Your Under Investigation in South Dakota

Federal investigations often proceed quietly for months before any arrest. Recognizing warning signs early can help you take apropriate steps before the situation escalates.

Direct contact from federal agents is the clearest sign. If FBI agents, IRS Criminal Investigation agents, SBA Office of Inspector General investigators, or Department of Homeland Security agents contact you about your PPP loan, you are being investigated. Joshua Booth’s case was investigated by DHS. Steven Knigge’s case involved IRS Criminal Investigation. Do not answer there questions without an attorney present.

Less obvious signs include banks notifying you about subpoenas for your account records, former employees or buisness partners mentioning they were questioned about you, or accountants recieving requests for documents related to your buisness finances. Any of these events suggests prosecutors are gathering evidence.

Grand jury subpoenas are a clear indication that indictment may be forthcomming. James Bunker’s original indictment was superseded with additional charges, showing how cases can expand as prosecutors develop more evidence. If you recieve a subpoena or learn a grand jury is investigating you, having experienced federal defense counsel is absolutley essential.

What to Do If Federal Agents Contact You

Your response when federal agents first contact you can significently affect your case. Many defendants make there situations worse by trying to explain or lie. Heres what you should and shouldnt do.

Do not answer questions about your PPP loan without an attorney. You have the right to remain silent under the Fifth Amendment. Agents are trained interrogators and anything you say becomes evidence. Even truthfull statements can be twisted or misremembered. Simply say “I’d prefer to speak with an attorney before answering any questions” and leave it at that.

Do not lie to federal agents. Making false statements to a federal officer is a seperate crime under 18 U.S.C. § 1001 carrying up to 5 years in prison. Many defendants who might have avoided conviction on the underlying fraud have been convicted for lying during the investigation. If your going to talk at all, you risk either incriminating yourself on the fraud or commiting a new crime by lying.

Do not destroy documents or records. Obstruction of justice charges can be added if prosecutors believe you destroyed evidence. Keep all records related to your PPP application. Your attorney will need these to prepare your defense.

Contact an experienced federal criminal defense lawyer immediatley. Time is critical. An attorney can sometimes negotiate with prosecutors before charges are filed to prevent prosecution or reduce charges. Early intervention is much more effective then waiting until your indicted.

Potential Defenses in South Dakota PPP Cases

Several defenses may be available depending on your specific situation. An experienced federal defense attorney can evaluate which defenses apply to your case.

Lack of intent is the most common defense. The government must prove you knowingly and intentionaly made false statements. If you genuinley believed your application was accurate based on your understanding of program requirements, you may lack the criminal intent required for conviction. The PPP program was rolled out with confusing guidance that left many legitimate buisness owners unsure about eligability.

Mistakes do not automaticaly equal fraud. If you miscalculated payroll expenses or misunderstood employee counting rules, that error might not constitute criminal fraud. The distinction between honest mistakes and intentional deception is critical. This defense works better when you can show reasonable efforts to comply with requirements.

Reliance on professional advice can be a defense if you reasonably relied on an accountant, attorney, or loan officer who told you the application was proper. You must show you disclosed accurate information to the professional and followed there advice in good faith.

Cooperation and restitution can significently reduce sentences. South Dakota defendants who cooperate early and make efforts to repay funds typically recieve lower sentences. The difference between Joshua Booth’s 18 months and Steven Knigge’s 33 months reflects not just fraud amount but cooperation and criminal history.

The Statute of Limitations Question

Many people wonder wheather they can still be charged for 2020 PPP loans. The answer is definitley yes, and the window extends longer then most people realize.

Wire fraud has a 5-year statute of limitations. PPP loans from 2020 can be charged through 2025. However, Congress passed the PPP and Bank Fraud Enforcement Harmonization Act of 2022, extending the limitations period to 10 years for certain PPP fraud charges. This means 2020 loans remain chargeable through 2030.

Bank fraud charges have always had a 10-year limitations period. Steven Knigge was sentenced in July 2024 for fraud commited in 2021. James Bunker faces charges for conduct spanning 2020-2021, with his case still pending in 2025. Federal prosecutors have made clear they intend to continue pursuing PPP fraud for years to come.

Do not assume your safe becuase time has passed. Many investigations take years to develop. Both Knigge and Booth were prosectued years after there fraud occurred. You may be under investigation right now without knowing it.

Taking Action to Protect Yourself

If you have concerns about your PPP loan application, taking proactive steps now is far better then waiting for federal agents to show up. South Dakota’s single federal district is actively prosecuting pandemic relief fraud, and even small-dollar cases result in prison sentences.

An experienced federal defense attorney can help you evaluate your situation. Some defendants have benifited from approaching prosecutors before being charged. Voluntarily disclosing problems and offering repayment can sometimes result in civil resolution rather then criminal charges. However this aproach requires careful legal guidance and isnt right for everyone.

Whether your currently under investigation or simply worried about potential exposure, preserving documents and avoiding suspicious actions is important. Continue operating your buisness normaly. Do not make unusual transfers that could be interpretted as hiding assets.

South Dakota PPP fraud prosecutions show that neither small fraud amounts nor advanced age provides protection. The federal sentencing guidelines provide structure, but individual circumstances matter enormously. A 77-year-old former fraud investigator recieved 33 months. A 27-year-old with no apparent criminal history recieved 18 months for the same loan amount. Understanding your specific situation requires consulting with federal defense counsel who knows the District of South Dakota and can advise you on the best aproach for your circumstances.