Target Letter PPP Fraud

Target Letter PPP Fraud

You received a target letter about your PPP loan. Your first instinct is relief – finally, you’re being told what’s happening. You have advance notice. You have time to prepare, to explain, to hire a lawyer and mount a defense. Here’s what nobody explains: the target letter isn’t advance notice. By the time that letter arrives, the investigation has been running for 4-6 months. Federal agents already pulled your bank records. They already subpoenaed your tax returns from the IRS. They already interviewed your employees, your accountant, maybe your bank officer. The evidence collection is complete. The case is built. The target letter doesn’t mean you’re being investigated. It means the investigation is almost over – and you have 30-90 days before grand jury indictment.

Welcome to the Spodek Law Group resource on what a federal target letter actually means – and why the timeline is completely different from what most people assume. Our goal is to show you exactly where you are in the federal enforcement process, because the letter itself doesn’t explain any of this. It reads like notification. It feels like the beginning. But behind every target letter is months of investigation you didn’t know about. While you were living your normal life, federal agents were building a case against you. The letter is when they decide to tell you what they’ve been doing.

That’s the reality Todd Spodek and the Spodek Law Group team explain to clients who call after receiving a target letter. The initial reaction is always identical: “I just got this letter – the investigation is just starting, right?” Wrong. The investigation started months ago. The evidence is gathered. The witnesses are interviewed. The target letter is your notice that decisions are being made – and those decisions happen fast. You have weeks, not months. Everything depends on what you do next.

The Investigation Ran 4-6 Months Before You Got That Letter

Heres the timeline reality that changes everything about your situation. The target letter arrived today. The investigation started 4-6 months ago. You just didnt know.

Federal PPP fraud investigations in 2025 are moving faster than before – the median time from initial referral to indictment has decreased by 45% compared to 2022-2023. What used to take 8-12 months now takes 4-6 months. The DOJs PPP Strike Force has dedicated resources and there procesing cases at industrial scale.

Think about what happened during those 4-6 months while you had no idea. Months one and two: the SBA refered your case to FBI or IRS Criminal Investigation based on Suspicious Activity Reports or audit flags. You recieved no letter, no warning, no notification. Agents started pulling records.

Months three and four: the critical evidence-gathering window. Agents pulled complete bank records showing your PPP deposit and every transaction afterward. They got your IRS transcripts – every tax return, every 941, every Schedule C. They interviewed people who worked with you. Your name came up in conversations. People were asked questions about you. You still didnt know.

Months four and five: prosecutors made the target decision. The case file is essentially complete. Evidence is organized. The government has decided your guilty – now there deciding how to proceed.

Month six: grand jury presentation. The point of no return.

That letter you just recieved? Your probly somewhere around month five. The investigation isnt starting. Its ending.

94% Indictment Rate for Loans Over $150,000

Heres the statistical reality of your situation. If your PPP loan was $150,000 or more and involved fabricated documentation, the grand jury indictment rate is 94%.

Ninety-four percent.

The government dosent send target letters unless there confident. When you recieve one, your not facing a 50/50 chance. Your facing near-certainty of charges.

For loans between $50,000 and $150,000 with documentation omissions, the indictment rate drops to 62%. Still high – but meaningfuly lower. Loans under $50,000 with partial documentation? 69% of those cases end in civil resolution rather then criminal prosecution.

Geographic factors matter too. Southern District of New York has an 88% indictment rate. SDNY prosecutors prefer grand jury indictments even for cooperative defendants becuase SDNY juries are prosecution-friendly. Central District of California has a 59% indictment rate – the highest information rate nationaly.

Northern District of Georgia has prosecuted over 180 PPP fraud cases with a conviction rate exceeding 96%. Once indicted in certain districts, acquital is essentialy impossible.

These numbers should shape your expectations. If your loan was over $150,000 and involved documentation issues, your facing a 94% chance of indictment. Acting like theres a good chance this goes away isnt realism – its denial.

30-90 Days: The Only Window That Matters

After recieving a target letter, you have roughly 30-90 days before the grand jury indicts. Thats the window. Thats all the time you have.

This is your only chance to potentialy avoid criminal charges. During this window, you can meet with prosecutors. You can provide your side of the story threw counsel. You can explore cooperation options. You can negotiate. You can potentialy convince them there case isnt as strong as they think.

Once indicted, that window closes. Your no longer negotiating wheather to charge. Your negotiating plea terms. Your arguing about sentence length, not innocence. The dynamic shifts completly.

OK so lets talk about what you can actualy do during those 30-90 days.

Pre-indictment cooperation offers maximum benifit. If you come forward before charges are filed, provide truthfull information, and help the government, prosecutors might decide not to charge you at all. Or they might charge lesser offenses. This is the best possible credit.

The target letter creates artificial urgency – but its real urgency. You have weeks to make decisions that affect the rest of your life. Using that time wisely is the difference between prison and resolution.

The First Cooperator Gets the Best Deal

Heres the uncomfortable truth about cooperation that nobody explains clearly. The cooperation window dosent just close when you get indicted. It closes when someone else cooperates first.

First defendants to cooperate get the best deals. Once multiple co-defendants are providing information, your cooperation is worth less. The government already has what they need. Your testimony becomes redundant.

Think about what that means. If your PPP application involved other people – a business partner, an accountant who helped prepare it, employees who signed documents – there racing against you. By day 60 of your 90-day window, other targets may have already made deals. You dont know whos cooperating. You dont know what there saying about you. You just know your clock is running.

Under the Federal Sentencing Guidelines § 5K1.1, substantial assistance can reduce your sentence by 50% or more – sometimes below the manditory minimum. But that reduction goes to cooperators, not to people who waited.

The first person to walk in the door with usefull information gets credit. The second person gets less. The third person gets minimal reduction. If your the fifth cooperator, your providing information everyone else already gave.

This creates a prisoners dilema dynamic. You might want to stay silent and hope for the best. But your co-targets might be cooperating right now. They might be telling prosecutors everything about your involvement while you wait.

Why the Government Sent You a Target Letter

Heres the part most people get completly wrong. They think the target letter is a warning – the government being fair, giving you advance notice, following proper procedure.

Target letters arent warnings. There prosecution tools.

The DOJ isnt required to send target letters. Most people indicted never recieved one. When prosecutors send a target letter, its becuase there confident enough in there case that they want to see how you respond.

Will you panic and confess? Will you cooperate and provide information about other targets? Will you make statements they can use against you at trial? The letter serves prosecutorial purposes, not defendant fairness.

According to the U.S. Attorneys Manual, target letters serve three purposes. First, give you opportunity to present your side before indictment. Second, encourage cooperation if you have information about other targets. Third, apply pressure to resolve the case quickly.

Read that list again. Two of the three purposes benifit the prosecution directly. Only one potentialy benifits you – and even that depends on having meaningfull information to share.

The target letter is a tactical move dressed up as procedural fairness. Dont confuse the gesture with kindness.

The Proffer Session Trap: “Queen for a Day” Can Become Your Confession

After recieving a target letter, your attorney might suggest a proffer session – sometimes called “Queen for a Day.” This is a meeting with prosecutors and agents where you tell them everything about your involvement.

The proffer comes with limited immunity. Your statements cant be used against you directly. Sounds safe, right?

Heres the trap. Proffer agreements typicaly include language that your statements can be used against you if you later testify inconsistantly – or if the cooperation agreement falls threw.

If you lie in the proffer, the government can use everything you said. If cooperation falls threw for any reason, your statements become evidence. If you later go to trial and your testimony differs from what you said in the proffer, prosecutors will hammer that inconsistancy in front of the jury.

The session designed to help you can become your confession. The immunity has an asterisk.

Successful proffers require completley honest disclosure. You cant hold back information. You cant shade the truth. You cant protect co-conspirators. The moment you’re caught in any inconsistancy, the agreement collapses and everything you said becomes fair game.

This is why proffer decisions require sophisticated legal strategy. The wrong move dosent just fail to help – it makes your situation dramaticaly worse.

40% Longer Sentences: The 2025 Reality

Defendants sentenced in 2024-2025 are recieving prison terms 40% longer on average then defendants sentenced in 2021-2022 for identical conduct.

The era of probation for PPP fraud is essentialy over.

Federal judges have lost patience. They’ve seen hundreds of PPP fraud cases. There no longer sympathetic to sob stories about pandemic desperation or confusing program rules. The “I didnt understand the requirements” defense that might have worked in 2021 gets you extra time in 2025.

Even small fraud amounts result in prison. A $21,000 PPP fraud case in Cincinnati resulted in 18 months federal prison time – in March 2025. Thats prison for stealing less then the cost of a used car.

The sentencing guidelines for PPP fraud cases have become predictable patterns. Under $50,000: 6-18 months. $50,000-$150,000: 18-36 months. Over $150,000: 36-60 months or more. Aggravating factors like fake employees or multiple loans push sentences higher.

Your target letter arrived in an enforcement environment thats harsher then anything seen in previous years. Judges who showed lenency in 2021 are imposing real time in 2025. Planning for probation is planning for dissapointment.

The 10-Year Statute of Limitations Means This Was Planned

Congress extended the statute of limitations for PPP fraud from 5 years to 10 years in 2022. Your 2020 loan can be prosecuted until 2030. Your 2021 loan until 2031. That target letter arriving in 2025? Right on schedule.

The government isnt running out of time. There just getting started on the second wave.

The first wave prosecuted the obvious cases – large dollar frauds, egregious fabrications, people who bought Lamborghinis with PPP funds. Those cases made headlines. Now there moving to the second wave. Smaller loans. More technical violations. People who thought there safe becuase years have passed.

The COVID-19 Fraud Enforcement Task Force has charged more than 3,500 defendants with federal crimes, recovered more than $1.4 billion in government funds, and filed more than 400 civil suits since May 2021. IRS Criminal Investigation has investigated more then 1,600 pandemic-related fraud cases involving $8.9 billion in taxpayer losses. More then half of these investigations were initiated in the past 12 months.

The pace is accelerating, not slowing.

That target letter isnt late. The government has been methodicaly building cases, prioritizing by dollar amount and evidence strength, timing there outreach for maximum impact. Your just finding out now becuase your number came up on there timeline.

The passage of time means nothing. Your loan was disbursed four years ago? Dosent matter. It was forgiven three years ago? Dosent matter. Forgiveness dosent mean the fraud investigation ends – it means the administrative process concluded while the criminal investigation continued in the background.

What Happens If You Ignore the Target Letter

Some people recieve a target letter and decide to do nothing. They hope ignoring it makes the problem go away. They figure if they dont respond, maybe prosecutors will move on to someone else.

This is exactly wrong.

Ignoring a target letter dosent stop the investigation. The grand jury meets on schedule wheather you respond or not. Prosecutors present there case. The grand jury indicts. The first time you hear anything is when federal agents show up to arrest you.

The letter was an opportunity. An opportunity to meet with prosecutors threw counsel. An opportunity to present your side. An opportunity to explore cooperation. An opportunity to potentialy affect the outcome before it becomes final.

When you ignore the letter, you forfeit that opportunity. You give up your only chance to influence the process before indictment. You let prosecutors proceed entireley on there terms, with there evidence, on there timeline.

And heres the part most people dont understand. Prosecutors take note of silence. They interpret failure to respond as consciousness of guilt. They use it at sentancing – “the defendant knew about this investigation and chose not to participate, chose not to explain, chose not to provide any exculpatory information.”

Your silence becomes evidence. Your inaction becomes aggravation. Your hope that it goes away becomes the reason your sentence is longer.

What to Do When the Target Letter Arrives

At Spodek Law Group, Todd Spodek and the federal defense team handle exactly this situation. Clients call after recieving target letters, confused about timelines and panicked about outcomes. Heres the advice we give.

First, understand the timeline reality. You have 30-90 days, not months. The investigation ran for 4-6 months before you knew about it. Your entering at the end, not the beginning. Every day matters.

Second, do NOT respond without federal criminal defense counsel. Whatever you say to prosecutors becomes evidence. Whatever you write in response becomes an exhibit. The letter invites your response – and your response builds there case unless handled correctly.

Third, evaluate cooperation honestly. Do you have information about other people involved? Can you provide substantial assistance to the government? Cooperation isnt for everyone – but for the right cases, it can mean the difference between prison and resolution.

Fourth, prepare for the proffer decision. If cooperation makes sense, the proffer session needs carefull preparation. You need to know exactly what your going to say, exactly what information you have, and exactly what risks the session creates.

Fifth, contact a federal criminal defense attorney immediatly. Not next week. Today. The 30-90 day window is already running. An attorney can meet with prosecutors, assess the evidence against you, and develop strategy while theres still time.

If you recieved a target letter about your PPP loan, call Spodek Law Group at 212-300-5196. The consultation is confidential. We can help you understand exactly what the letter means, where you are in the investigation timeline, what cooperation options exist, and how to use the 30-90 day window effectivley.

That target letter isnt the start of your problem. Its the announcement that your problem has been building for months. The evidence is collected. The case is built. The decision to prosecute has been made. The only question is how you respond during the narrow window that remains.

Most people waste that window in denial. They hope it goes away. They wait for more information. They tell themselves it cant be as serious as it sounds. By the time there ready to act, the grand jury has already indicted.

You know now. The investigation ran for months. The evidence is gathered. The 94% indictment rate applies to you. The 30-90 day window is open. What you do in the next days and weeks determines wheather you have any options left – or wheather the only remaining decisions belong to prosecutors and judges.

The letter looks like a warning. Its actualy the final countdown. The government spent months building the case. They chose this moment to tell you. The 30-90 day window is your only opportunity to potentialy change the outcome.

Dont waste it hoping the problem disappears. It wont. The grand jury meets on schedule. The prosecutors present there case. The 94% indictment rate applies wheather you respond or not.

The difference is wheather you have any say in what happens next – or wheather that decision belongs entirely to prosecutors and judges who’ve never heard your side. The target letter is your invitation to be heard. The clock is running. Respond accordingly.