Are They Still Arresting People for PPP Fraud in 2025?

Are They Still Arresting People for PPP Fraud in 2025?

You got that PPP loan back in 2020. Maybe 2021. The application was rushed, the rules were confusing, and everyone was doing it. Five years have passed. Your loan got forgiven. You never heard anything from the government. And now you’re wondering – are they still arresting people for PPP fraud, or has enough time passed that you’re finally safe?

The answer is going to make your stomach drop. Not only are federal prosecutors still arresting people for PPP fraud – they’re arresting MORE people now than they were two years ago. The enforcement didn’t slow down after five years. It accelerated. And here’s the part that nobody is telling you: the five years of silence wasn’t the government losing interest. It was the government building the infrastructure to catch you.

Welcome to what federal prosecutors call “harvest mode.” The planting season is over. They spent years developing AI pattern detection, cross-referencing databases, and training investigators. Now they’re reaping. In June 2025 alone, the Department of Justice announced charges against over 200 individuals in a single enforcement sweep. That’s not an agency winding down. That’s an agency hitting its stride.

The Silence That Wasn’t Safety

OK so heres the thing most people dont understand about federal investigations. The silence wasnt safety. It was preparation. While you were relaxing and thinking you’d gotten away with it, federal agencies were building something.

Think about what had to happen before they could go after PPP fraud at scale. The Paycheck Protection Program disbursed $800 billion in loans in a matter of months. Millions of applications. Hundreds of lenders. Complete chaos. There was no way to investigate that mess in real time – the government basicly got run over by there own program.

But heres what the government did during those quiet years. They built databases. They developed AI pattern detection algorithms that could flag suspicious applications. They cross-referenced PPP data with tax returns, with bank records, with pandemic oversight reports. They trained investigators. They set up task forces.

The COVID-19 Fraud Enforcement Task Force wasnt created until 2021. It didnt really hit its stride until 2023. And the results your seeing now – the 200+ arrests, the 700+ active investigations – thats the harvest. The planting season is over. Your five years of silence? That was just them getting ready.

Legal analysts at Benesch Law report that PPP fraud enforcement has actualy accelerated in 2024 and 2025. The cases getting resolved now are more sophisticated, involving larger amounts and more complex schemes. But dont let that fool you into thinking there only going after big fish. Were going to get to that myth in a minute.

Harvest Mode: The Numbers That Should Scare You

Lets talk numbers. Because the numbers are terrifying.

In June 2025, the Department of Justice announced it charged over 200 individuals and entities, and seized over $78 million, in connection with PPP COVID-19 relief fraud. Thats one announcement. One sweep. 200 people.

According to pandemic oversight data, there are currently more than 700 active investigations into PPP and EIDL loan fraud. Seven hundred. Ongoing right now. And these arnt cold cases sitting in a drawer somewhere – there active investigations with agents working them.

Heres the kicker. To date, investigations have resulted in more than 700 indictments with total charged losses exceeding $1.2 billion. But the total fraud is estimated in the hundreds of billions. Which means the government has barely scratched the surface. There still coming.

In February 2025, Colin Huntley – Deputy Director of the DOJ Civil Fraud Division – said publicly that the Department is currently pursuing over 700 cases involving pandemic-era programs. He emphasized that the current wave of investigations is targeting “larger, more complex schemes” involving layered ownership structures and sophisticated concealment tactics.

But wait – theres more. In January 2025, a Georgia grand jury returned 13 seperate indictments charging 21 defendants for PPP fraud. This wasnt in New York or Los Angeles. This was in Mitchell County, Georgia – a rural county with a population under 25,000. If there prosecuting PPP fraud in Mitchell County, Georgia, there prosecuting it everywhere.

Let that sink in. Five years later. 200+ charged in a single DOJ announcement. 700+ active investigations. And small rural counties getting indictments. This isnt winding down. This is ramping up.

The People Who Will Turn You In

Heres something nobody talks about. The government dosent have to find you. Someone else will.

Theres a law called the False Claims Act. Under this law, private citizens can file lawsuits on behalf of the government against people who defrauded federal programs. Its called a “qui tam” action. And heres why it matters for PPP fraud: the person who files the lawsuit – the whistleblower – gets to keep between 15 and 30 percent of whatever the government recovers.

Think about that. Your business partner who helped you apply for that PPP loan? If they turn you in and the government recovers $100,000, they could pocket $30,000. Your accountant who prepared the application? Same deal. Your ex-spouse who knows where the bodies are buried? Financial incentive to bury you first.

In June 2025, the DOJ announced that three affiliated companies settled PPP fraud allegations for $13 million. The whistleblower – the relator – got $2.34 million. Two point three four million dollars for filing a lawsuit. You think your disgruntled former employee wont be tempted by numbers like that?

The False Claims Act is basically a bounty system. And its working. The DOJ’s fiscal year 2024 report showed the highest number of qui tam actions filed in history. Alot of those are PPP cases. People are turning each other in for money.

We dont know who might report you. Thats the point. It could be anyone who knew about the fraud. Anyone who has a reason to make money off your destruction. The government dosent have to find everyone. People will find each other.

The Clock That Keeps Running

You probly think the statute of limitations is five years. It was.

In August 2022, Congress extended the statute of limitations for PPP and EIDL fraud to ten years. Ten. Not five. The PPP and Bank Fraud Enforcement Harmonization Act of 2022 passed with bipartisan support. Republicans and Democrats agreed on exactly one thing: they wanted more time to prosecute PPP fraud.

For first-draw loans from April 2020, the criminal statute expires in April 2030. For second-draw loans from 2021, its 2031. For forgiveness applications submitted later, it could be 2032.

But heres the part most people miss. The ten-year clock dosent start from when you applied for the loan. It starts from your LAST fraudulent act related to that loan. Did you submit a forgiveness application with false information? The clock starts there. Did you use PPP funds for something unauthorized after the application? The clock starts from that last use.

So if you applied in April 2020, received funds in May 2020, and submitted a forgiveness application with false certifications in 2021, your statute of limitations might not run until 2031. Maybe later. The government has time. Alot of time.

How They Find You

Investigation triggers work differently than most people assume. Federal investigators dont typically start with your name and work backwards. They start with patterns and work forwards.

The SBA maintains a public database of every PPP loan over $150,000. Anyone can search it. Journalists use it. Competitors use it. Investigators use it. Your loan application information is basicly public record.

Pattern detection algorithms flag applications with common fraud indicators. Loans where the payroll numbers dont match tax filings. Loans where multiple applications came from the same IP address. Loans where the business has no digital footprint before 2020. Loans where the Schedule C looks fabricated.

Bank Secrecy Act reports from 2020 and 2021 are being cross-referenced with PPP applications. If your bank filed a Suspicious Activity Report when that deposit hit your account, investigators may already know about it. The data matching happens automaticaly now.

IRS Criminal Investigation shares data with SBA OIG. If your tax returns dont match your PPP application, thats a red flag. If you claimed $100,000 in payroll on your PPP application but only reported $30,000 in wages on your tax returns, the algorithm catches that discrepancy.

Investigators also work cases forwards from cooperating defendants. When someone gets caught, there often offered a deal: cooperate and name other participants, or face the full weight of federal prosecution alone. Most people cooperate. And when they do, names come up. Your name might already be in someones proffer session.

The Small Fish Myth

Maybe your telling yourself this: “I only got $30,000. There going after the big fish. Im not worth there time.”

Thats what the defendants in Mitchell County, Georgia thought too. Then 21 of them got indicted in February 2025. In a single county. Mitchell County has a population of about 21,000 people. This isnt Manhattan. This isnt a major federal court district. This is rural Georgia.

The Georgia Attorney General announced the indictments and made clear that no amount is too small for prosecution. The government isnt just going after million-dollar schemes. There going after whatever they can prove.

Heres the thing about small cases that people dont understand. Small cases are EASIER to prosecute, not harder. A $30,000 loan has less complexity. Fewer moving parts. Simpler evidence. The documents fit in a single folder. The jury can understand it in an hour.

Compare that to a $3 million scheme with multiple companies, layered transactions, and complex ownership structures. Those cases take years to build. Small cases can be charged, tried, and sentenced in months.

Prosecutors also use small cases to build bigger cases. They charge someone with a $30,000 fraud, offer a cooperation deal, and that person provides information about there conspirators. The small fish leads to the medium fish leads to the big fish. Your “small” case might be someone elses cooperation ticket.

And remember the False Claims Act. Whistleblowers dont care if your fraud was $30,000 or $3 million. They get a percentage either way. A $9,000 bounty for turning in a $30,000 fraud is still real money. Your business partner, your accountant, your ex – they all have financial incentive to report you regardless of the amount.

The only difference between a $30,000 case and a $3 million case is the resources required. And now that the infrastructure is built, the resources exist. There is no amount too small for prosecution.

What Actually Triggers an Investigation

Knowing how investigations start can help you understand your risk. But it can also make clear that avoiding detection may no longer be possible.

The most common triggers for PPP fraud investigations include:

Tax return mismatches. If your PPP application claimed payroll numbers that dont match your tax filings, the algorithms flag that automaticaly. This is probably the single biggest source of investigations.

Whistleblower reports. As discussed above, qui tam lawsuits are at record highs. Former employees, business partners, accountants, and family members are all potential whistleblowers with financial incentive to report.

Cooperating defendants. When someone else in your network gets caught, there often asked to name others involved. If you worked with a PPP preparer who got arrested, your name is probly already in the system.

Bank-generated Suspicious Activity Reports. Banks are required to file SARs for unusual transactions. Large PPP deposits followed by immediate withdrawals for luxury purchases trigger these reports automaticaly.

Pattern matching from the public database. Multiple applications from the same address. Multiple loans to related businesses. Loans to businesses with no history. These patterns get flagged and investigated.

Once an investigation opens, the government has subpoena power to access your bank records, your tax returns, your business documents – everything. If there looking, they will find the evidence they need. The question is wheather there looking yet.

What Happens If You Get Caught

The penalties for PPP fraud are severe. Wire fraud carries up to 20 years per count. Bank fraud carries up to 30 years. False statements to a financial institution carry up to 30 years. And most defendants face multiple counts.

In October 2024, a Texas couple was sentenced to a combined 32 years in federal prison for PPP fraud. Not months. Years. A Nevada man got 15 years for an $11 million scheme. An Illinois tax preparer got 42 months for $3 million in fraud. Sharnae Every got 41 months for preparing fraudulent applications for others.

Beyond prison time, defendants face restitution. You have to pay back every dollar you defrauded. The government can seize assets. Freeze bank accounts. Garnish wages. They will pursue collection for years.

If your not a U.S. citizen, PPP fraud can trigger deportation proceedings. Its a crime involving moral turpitude. It can affect your immigration status, your ability to naturalize, your green card renewal.

If you hold professional licenses – CPA, law license, medical license, nursing license – a federal conviction for fraud basicly ends your career. Professional licensing boards take fraud convictions seriously.

The consequences of PPP fraud dont end when you leave prison. They follow you for life.

Can You Make This Go Away?

Some people think they can pay back the loan and avoid prosecution. This is dangerous thinking.

If the government contacts you about PPP fraud and you offer to pay it back, that can actualy be used as evidence of guilt. Its called “consciousness of guilt.” Why would you offer to repay a legitimate loan? The offer to repay suggests you knew the loan was fraudulent.

Voluntary disclosure is complicated. Some defendants have successfully negotiated civil resolutions instead of criminal charges. But this requires sophisticated legal strategy, and its not guaranteed to work. The government is under no obligation to accept a civil settlement when criminal charges are available.

The reality is this: if your reading this article because your worried about PPP fraud, you need a lawyer. Not tommorrow. Now. Before you talk to anyone. Before you respond to any government communication. Before you make any decisions about what to do.

Talking to investigators without a lawyer is one of the worst mistakes you can make. Even if you think your going to explain everything and clear it up, you can make statements that become evidence against you. You can be charged with lying to federal agents even if the underlying fraud charges dont stick.

Never talk to federal investigators without a lawyer present.

The Federal Investigation Timeline

If your already under investigation, understanding the timeline can help you prepare. But most people dont realize how long these cases take to develop – and thats actualy part of the problem.

A typical PPP fraud investigation unfolds over months or years. It might start with an automated flag from the pattern detection systems. Maybe your application triggered an alert becuase the numbers didnt match your tax returns. That alert goes into a queue. Eventually an agent reviews it.

The agent pulls your bank records using an administrative subpoena. They dont need a warrant for bank records – the Bank Secrecy Act gives them access. They review your deposits, your withdrawals, what you actualy spent the money on. They compare it to what you certified on the application.

If they find discrepencies, the case gets escalated. More records get pulled. They might interview people you did business with. They might subpoena your accountant. They definitly pull your tax returns. All of this happens without you knowing.

By the time you get that first letter – wheather its from the SBA, the DOJ, or an FBI agent leaving a card at your door – the investigation has probly been going on for months. They already know alot. They already have a theory of the case. The interview request isnt them figuring out wheather you committed fraud. Its them confirming what they already beleive.

Thats why early intervention matters so much. If you have any reason to think your PPP loan might have problems, the time to talk to a lawyer is before you hear anything from the government. Once there reaching out, the investigation is already advanced.

Why Getting a Lawyer Now Matters

Look, I know what your thinking. Lawyers are expensive. Maybe your hoping this all just goes away. Maybe your thinking you can handle it yourself if something comes up.

That thinking will get you indicted.

Federal criminal defense is completly different from any other kind of legal work. The government has unlimited resources. They have investigators, forensic accountants, data analysts. They have the ability to compel documents and testimony. Going up against that machine without experinced counsel is like bringing a knife to a gunfight.

A good federal criminal defense attorney – someone whos actualy handled PPP fraud cases – knows how these investigations work. They know which U.S. Attorneys offices are most agressive. They know what triggers prosecution versus civil resolution. They know how to position a case for the best possible outcome.

At the Spodek Law Group, we handle these cases regularely. Todd Spodek and our team of federal defense attorneys understand the specific challenges of PPP fraud investigations. We know how to navigate the process, how to protect your rights, and how to work toward the best resolution possible given the facts.

Heres what most people dont understand. The earlier you get a lawyer involved, the more options you have. Once your indicted, your options narrow dramaticaly. Before that point, there may be opportunities for civil resolution, voluntary disclosure, or cooperation that can change the trajectory of your case.

If your reading this article becuase your worried about a PPP loan, call us at 212-300-5196. The consultation is confidential. We can evaluate your situation and help you understand your options before the government makes the next move.

The Bottom Line

Are they still arresting people for PPP fraud? Yes. More than ever. The enforcement didnt slow down after five years – it accelerated. The silence you experinced wasnt safety. It was the government building the tools to catch you.

The statute of limitations runs until 2030, 2031, maybe 2032 depending on your last fraudulent act. Theres time. The 700+ active investigations wont all resolve tommorrow. New cases are being opened constantly. Whistleblowers are filing qui tam suits at record rates.

If you took a PPP loan and your worried about fraud exposure, the time to act is now. Not when you get a letter. Not when agents show up. Now. Get a lawyer who handles federal criminal defense. Understand your exposure. Make a plan.

The harvest is underway. Dont wait to see if your name comes up.