Vermont PPP Loan Fraud Lawyers

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

Vermont is a small state, but that doesn’t mean federal prosecutors are going easy on PPP fraud. U.S. Attorney Nikolas Kerest has publicly stated that “addressing pandemic-related fraud is a priority” for his office. Every case goes to the same federal courthouse in Burlington. The judges there have seen the pattern. And the sentences are real: 46 months for one defendant, 5 months for another, with more prosecutions pending.

If you received a PPP or EIDL loan and you’re worried about whether the government is looking at you, this article will tell you exactly what Vermont defendants have faced. Not theoretical maximums. Real sentences from real cases prosecuted right here in the District of Vermont. Small fraud amounts still resulted in prison when combined with prior convictions or other criminal conduct.

Here’s what nobody else will tell you: the latest Vermont indictments show prosecutors tracing PPP money into cryptocurrency investments and real estate purchases. They’re seeking forfeiture of a house in White River Junction bought with fraud proceeds. If you invested your PPP money in crypto or bought property, that spending pattern is exactly what investigators look for.

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

The government isn’t using some special pandemic law to prosecute PPP fraud in Vermont. They’re using federal fraud statutes that have existed for decades, and they’re stacking multiple charges to maximize your exposure. Understanding these charges is critical to understanding what you’re facing.

The most common charge is wire fraud under 18 USC 1343. You submitted your application electronically, so you used interstate wires. That’s enough for wire fraud. Maximum penalty is 20 years, but it jumps to 30 years if the fraud affected a financial institution. Since every PPP loan went through a bank or credit union, prosecutors will argue for the higher maximum.

Bank fraud under 18 USC 1344 is another major charge. You’re facing up to 30 years and a $1 million fine. Bounthavong Sonthikoummane got charged with bank fraud, wire fraud, AND money laundering for his $117,000 scheme.

False statements to the SBA under 18 USC 1014 carries up to 30 years. Jennifer Stocker got hit with this for lying to a credit union on her PPP applications. If you submitted fabricated IRS Schedule Cs like Sonthikoummane allegedly did, this charge is coming.

Money laundering under 18 USC 1956 gets added when you moved the money after receiving it. Sonthikoummane and his co-defendant Ashlyn Arcouette allegedly put most of their loan money into Coinbase cryptocurrency. That transfer from bank account to crypto exchange is money laundering on top of the fraud charges.

And if you have prior felony convictions, any gun involvement makes everything worse. Leon Delima was already facing PPP fraud charges when investigators connected him to a shooting in Burlington. His sentence jumped to 46 months because they added felon-in-possession charges under 18 USC 922(g).

What Vermont PPP Fraud Sentences Actually Look Like

Here’s where we get into what competitors won’t tell you. Forget the 30-year maximums. What are judges in Vermont actually handing down?

Leon Delima from Burlington got the harshest sentence weve seen in Vermont for pandemic fraud: 46 months in federal prison. His actual PPP fraud was only $17,833, which he spent in approximately two weeks on “consumer goods, life expenses, and other non-business items.” He also applied for $350,000 in EIDL funds that got denied. But what really hurt him was everything else. Hes a convicted felon. In July 2022, he discharged a stolen .40 caliber pistol on North Avenue in Burlington while possessing 35+ grams of cocaine. The gun possession charges under 18 USC 922(g) stacked on top of the fraud charges. Judge Christina Reiss also ordered him to pay over $20,000 in restitution and serve 3 years of supervised release.

Jennifer Stocker from New Haven got 4 months in prison for her PPP fraud, plus a consecutive 30-day term for violating her probation. Why the probation violation? Because she was already on probation from a 2018 false statements conviction when she submitted her fraudulent PPP applications. She lied to a credit union to get $59,395 in 2020, then lied again to get another $26,663 in 2021. Total fraud: $86,058. Chief Judge Geoffrey Crawford sentenced her to pay $86,873 in restitution plus 3 years of supervised release after prison.

Bounthavong Sonthikoummane and Ashlyn Arcouette from White River Junction are awaiting trial after a June 2024 indictment. Sonthikoummane allegedly submitted three fraudulent loan applications totaling over $117,000. Arcouette allegedly got one EIDL loan for $56,900. The government says they both put most of the money into Coinbase cryptocurrency and Sonthikoummane used fraud proceeds to buy a house in White River Junction. The government is seeking forfeiture of that house. If convicted, there both facing up to 20 years in prison and $250,000 fines.

The pattern is clear: even small fraud amounts result in prison when combined with prior convictions or additional crimes. And crypto investments plus real estate purchases become primary evidence of fraudulent intent.

Vermont’s Single Federal District: What That Means for Your Case

Unlike larger states with multiple federal court districts, Vermont has just one: the District of Vermont. Every federal case in the state goes to the courthouse in Burlington. Theres no venue shopping, no hoping your case gets assigned to a more favorable district.

This single-district reality has advantages and disadvantages. The advantage is that defense lawyers who practice regularly in Burlington know the judges, know the prosecutors, and know how cases flow through the system. The relationships matter alot.

The disadvantage is that the same judges see every PPP fraud case. Chief Judge Geoffrey Crawford sentenced Jennifer Stocker. Judge Christina Reiss sentenced Leon Delima. These judges have heard the excuses before. They know when defendants are being honest and when there not. Walking into Burlington with a weak defense or obvious lies is a mistake.

U.S. Attorney Nikolas “Kolo” Kerest has made pandemic fraud enforcement personal. He publicly stated that “addressing pandemic-related fraud is a priority” for his office. At least three prosecutions have been completed, with two or more investigations still pending. If you think Vermont is too small for federal prosecutors to notice, your wrong.

The Crypto-to-Real Estate Pipeline Prosecutors Are Targeting

The Sonthikoummane/Arcouette indictment reveals exactly what investigators look for when building PPP fraud cases. According to the government, both defendants “used most of the loan money to invest in Coinbase, a crypto-currency exchange.” Then Sonthikoummane allegedly used fraudulently-obtained proceeds to purchase a residence in White River Junction.

This spending pattern is a prosecutors dream. Heres why:

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

Second, real estate purchases create paper trails. Buying a house requires title searches, mortgage documents, closing statements. If the down payment came from PPP funds that went through crypto, investigators can trace that money. And real estate is easy to forfeit, the government dosnt have to track down hidden assets.

Third, this spending pattern proves intent. PPP loans were supposed to go toward payroll and business expenses. Putting the money into speculative crypto investments and real estate purchases shows you never intended to use it for the stated purpose. Its direct evidence of fraud.

The government is seeking forfeiture of Sonthikoummane’s residence. If convicted, he could lose the house entirely on top of prison time and fines.

How Federal Prosecutors Build PPP Fraud Cases in Vermont

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

First, they compare your PPP application to your tax returns. Sonthikoummane allegedly submitted “falsified IRS Schedule Cs with incorrect financial information.” The IRS has records of what you actualy filed. When your PPP application claims revenue and expenses that dont match your real tax filings, thats a red flag.

Second, bank records show were the money went. Leon Delima spent his $17,833 PPP loan in approximately two weeks on consumer goods. That rapid spending on non-business items is obvious evidence of fraud. Jennifer Stocker’s spending patterns similarly showed the money didnt go to business purposes.

Third, they trace money into investments and assets. The Sonthikoummane case shows investigators following funds from bank account to Coinbase to real estate purchase. Every step of that journey leaves records.

Fourth, prior convictions matter enormously. Both Delima and Stocker had prior convictions. Delima was a convicted felon prohibited from possessing firearms. Stocker was on probation from 2018. Prior convictions show a pattern and result in harsher sentences.

Never assume the government doesn’t know. Vermont is small, but the IRS, FBI, and SBA-OIG have the same investigative tools here as anywhere else. They have your application, your tax records, your bank records, and your crypto exchange history.

Defense Strategies That Actually Work

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

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

The PPP program was confusing. Rules changed constantly. SBA guidance was contradictory. Alot of people made honest mistakes about wheather there business qualified or how to calculate payroll. Honest confusion isnt fraud.

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

Voluntary repayment before charges can dramaticly change outcomes. If your under investigation but not charged yet, returning the money can affect wheather prosecutors even bring charges. Jennifer Stocker still went to prison, but her restitution payment was part of her plea agreement.

Distinguishing your conduct from other crimes is critical. Leon Delima’s 46-month sentence was driven largely by the gun possession charges. If you dont have other criminal exposure, your PPP fraud sentence will likely be much lower than his.

Can You Still Be Prosecuted for a 2020 PPP Loan?

Yes. Absolutley yes. The statute of limitations is longer than most people realize.

In 2022, Congress passed the PPP and Bank Fraud Enforcement Harmonization Act, extending the statute of limitations to 10 years for PPP fraud. Applications from 2020 can be prosecuted through 2030.

And the clock starts when you made your last false statement, not when you got the loan. Jennifer Stocker got loans in both 2020 and 2021. If you submitted a forgivness application with false information, the clock starts then. Every false certification resets your exposure window.

The Sonthikoummane/Arcouette indictment came in June 2024 for conduct that occured between July 2020 and February 2021. Thats more than three years after the fraudulent applications. The government has time on there side.

What to Do If Federal Agents Contact You

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

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

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

Heres why this matters in Vermont specifically: the agencies work together. The Delima case involved collaboration between ATF, IRS Criminal Investigation, and Burlington Police. The Sonthikoummane case involved multiple agencies. When you talk to one agent, youre creating evidence that all of them can use.

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

If you get a target letter, thats the government telling you your the focus of the investigation and an indictment is likely. This is emergency territory. You need a lawyer immediatly.

Why You Need a Federal Criminal Defense Lawyer

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

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

In Vermont specifically, you need someone who knows Chief Judge Crawford and Judge Reiss. Who has relationships with the prosecutors in U.S. Attorney Kerest’s office. Who understands how cases move through the District of Vermont. Vermont is small enough that relationships matter enormously.

The sentencing guidelines are complicated. Your sentence depends on loss amount, criminal history, wheather you had other charges stacked on top (like Delima’s gun case), wheather you were on probation when you committed the fraud (like Stocker), and dozens of other factors. Each factor can add or subtract levels from your offense score.

Leon Delima got 46 months. Jennifer Stocker got about 5 months. The difference wasnt just about the amounts. It was about criminal history, additional charges, and how the cases were handled from the beginning.

If your facing PPP fraud allegations in Vermont, your facing potential prison time, tens of thousands in restitution, possible forfeiture of property you bought with the funds, and a felony record that follows you forever. U.S. Attorney Kerest has made pandemic fraud a priority. The investigations are ongoing. This isnt the time to hope they dont find you. Contact a federal criminal defense lawyer who handles white collar cases in Vermont. Act now.