Criminal Defense Lawyers

Virginia PPP Loan Fraud Lawyers

Virginia has two federal districts prosecuting PPP fraud aggressively, and they operate completely differently. The Eastern District of Virginia, known as the “Rocket Docket,” is the fastest federal court in America. Cases move from indictment to sentencing at a pace that catches many defendants off guard. The Western District just unsealed a 24-defendant, 142-count indictment against an organized PPP fraud ring in Roanoke.

If you received a PPP or EIDL loan and you’re worried about an investigation, this article will tell you exactly what Virginia defendants have faced. Not theoretical maximums. Real sentences from real cases. A state government employee who used her job to steal identities got 70 months. A repeat offender got 51 months for under $200,000 in fraud. Two men running a $7.6 million scheme got a combined 6 years in prison.

Here’s what nobody else will tell you: the Special Inspector General for Pandemic Recovery (SIGPR) has a task force operating specifically in the Eastern District of Virginia. They’re not slowing down. The statute of limitations runs until 2030 or later for most PPP fraud. If you think you’re safe because years have passed, you’re wrong.

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

OK so heres the thing about PPP loan fraud charges in Virginia. The government isnt using some special pandemic law. There using federal fraud statutes that have existed for decades, and there stacking multiple charges to maximize your exposure.

The most common charge is wire fraud under 18 USC 1343. You submitted your application electronically, so you used interstate wires. Thats 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, prosecutors gonna argue for the higher maximum.

Bank fraud under 18 USC 1344 is another major charge. Your facing up to 30 years and a $1 million fine. Bennie Magee and Michael Gilcher got hit with this for there $7.6 million scheme in the Eastern District.

Money laundering under 18 USC 1956 gets added when you moved the money after recieving it. If you transferred PPP funds to personal accounts, bought cryptocurrency like Magee did, or purchased vehicles and real estate, thats money laundering on top of the fraud charges.

False statements charges under 18 USC 1014 carry up to 30 years. If you lied about payroll, employees, revenue, or how youd use the funds, this charge is basicly guarenteed to be on the table.

And theres a special charge for pandemic fraud. 18 USC 1040 covers fraud related to emergency benefits programs and carries up to 10 years. This is on top of everything else.

The 24-defendant Roanoke indictment included 142 counts. Wire fraud, conspiracy, money laundering, false statements, and emergency benefits fraud. When prosecutors go after fraud rings, they stack every possible charge.

What Virginia PPP Fraud Sentences Actually Look Like

Heres were we get into what competitors wont tell you. Forget the 30-year maximums. What are judges in Virginia actualy handing down?

Sadie Mitchell from Midlothian got the harshest sentence weve seen in Virginia for PPP fraud: 70 months, which is nearly 6 years. Her fraud totaled $1.8 million across three seperate schemes. But what really hurt her was HOW she did it. She worked for the Virginia Motor Vehicle Dealer Board and used her government database access to steal peoples identities. She filed at least 50 fraudulent unemployment applications using inmates’ personal information, plus 5 PPP applications and multiple EIDL loans. Using your government job to commit fraud gets you sentenced like a traitor.

Bennie Magee from Manassas got 5 years for running a $7.6 million scheme with his co-defendant Michael Gilcher. They created falsified payroll records, fake IRS returns, and fraudulent revenue reports. Magee invested over $5 million in cryptocurrency, vehicles, and personal expenses. Gilcher got 1 year because he returned about $620,000 of his share. U.S. Attorney Jessica Aber said they “not only lied to the IRS and stole millions of taxpayer funds, but frivolously spent it on items such as vehicles and cryptocurrency.”

Joseph Cherry from Norfolk got 51 months for just $196,900 in fraud. Why so harsh for a relatively small amount? Because hes a repeat offender. He was convicted in 2009 for a $1.5 million fraud scheme. He had over a dozen felony charges since 2002. He was under federal AND state supervision when he submitted his fraudulent PPP applications. The judge saw him as someone who will never stop commiting fraud.

Foad Darakhshan from McLean got 33 months for his role in a family conspiracy that submitted 63 fraudulent loan applications. He worked with his girlfriend, his brothers, and there friends to submit false PPP and EIDL applications. When you bring family into your fraud scheme, you create a conspiracy that implicates everyone.

Ibraheem Samirah from Herndon got probation despite being a former state legislator. He represented the 86th District in the Virginia House of Delegates from 2019 to 2022. His fraud was “only” $83,300 for his dental practice. He submitted false employee counts, payroll figures, and revenue documents. Being a former politician didnt save him from prosecution, but the relatively small amount and his cooperation resulted in no prison time.

The pattern is clear: how you commit the fraud matters as much as how much you steal. Using government access, being a repeat offender, or running organized schemes multiplies your sentence.

The 24-Defendant Roanoke Conspiracy: A Warning

In July 2024, the Western District of Virginia unsealed a 142-count indictment against 24 people involved in a PPP fraud ring operating out of Roanoke. This case shows exactly how fraud conspiracies work and why getting involved with one is so dangerous.

The organizers were Jaimeka Austin and Kiearra Gardner. Between June 2020 and May 2021, they collected personal information from people, including Social Security numbers and birthdates. If someone had an existing business, they submitted fraudulent applications in that business’s name. If someone didnt have a business, Austin and Gardner created a fake one for a fee.

The 22 other defendants claimed to own various fictional enterprises: dog kennels, cleaning services, childcare businesses, mobile car detailing. None of these businesses had actual operations, employees, or customers. Many of the defendants were simultaneously claiming unemployment benefits while applying for PPP loans as “business owners.”

Total fraud: over $1.5 million.

Austin has pleaded guilty and faces up to 30 years in prison. Shes the third defendant to plead guilty. 21 others are still pending.

U.S. Attorney Christopher Kavanaugh said: “This program provided much needed financial relief to keep small businesses open…a small number of people saw an opportunity to commit fraud.”

The lesson? If someone offered to help you get a PPP loan by creating a business or submitting paperwork for a fee, your part of a conspiracy. Everyone in that conspiracy is facing charges, and prosecutors are working through the defendants one by one.

The “Rocket Docket”: Why Eastern District Cases Move Fast

The Eastern District of Virginia has a reputation thats both famous and feared in federal criminal defense. Its called the “Rocket Docket” because cases move faster here than anywhere else in the federal system.

In most federal districts, you might have months between indictment and trial. In EDVA, cases can go to trial within 60-90 days of indictment. Discovery happens quickly. Motions get decided quickly. Sentencing happens quickly.

This speed creates both challenges and opportunites for defendants. The challenge is obvious: you have less time to prepare a defense. The opportunity is that if your going to cooperate, you can resolve your case faster and start serving your sentence sooner.

The Rocket Docket also means the judges have seen more PPP fraud cases than judges in slower districts. They know the patterns. They know the excuses. They’ve heard “I didnt understand the rules” a hundred times. Coming into EDVA with weak arguments or obviously false explanations is a mistake.

If your case is in Alexandria, Norfolk, Richmond, or Newport News, your in the Eastern District. Be prepared for things to move fast.

How Federal Prosecutors Build PPP Fraud Cases in Virginia

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. Magee and Gilcher got caught because they created “falsified payroll records, fake IRS tax returns, and fraudulent revenue reports.” The IRS has records of what you actualy filed. When your PPP application claims $500,000 in payroll but your Schedule C shows $50,000 in revenue, thats a red flag.

Second, bank records show were the money went. Mehdi Pazouki from McLean spent $27,000 at Hollywood Casino in Charles Town, West Virginia within DAYS of recieving his EIDL disbursement. That spending pattern became the primary evidence of his fraudulent intent. Magee’s cryptocurrency purchases were similarly obvious.

Third, government databases can reveal identity theft. Sadie Mitchell got caught because investigators traced the identities used in her fraud back to her queries in the Virginia Motor Vehicle Dealer Board database. If you used your job access to steal information, there are logs.

Fourth, co-conspirators talk. The Roanoke ring is falling apart because defendants are pleading guilty and presumably cooperating. When 24 people are indicted together, the first ones to cooperate get the best deals.

Never assume the government doesn’t know. The SIGPR task force in Eastern Virginia is specifically designed to catch pandemic fraud. They have your application, your tax records, your bank records, and potentially testimony from anyone who helped you.

Defense Strategies That Actually Work

OK so your facing an investigation or charges in Virginia. 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. Joe Slaiby from Gainesville settled his case civilly for $350,000 without criminal charges because he cooperated early. If your under investigation but not charged yet, returning the money can affect wheather prosecutors even bring charges.

Distinguishing yourself from the conspiracy matters in ring cases. If you were recruited into a scheme without understanding its full scope, if you thought you were applying for a legitimate loan, your lawyer needs to establish that your role was different from the organizers.

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. If you submitted a forgivness application with false information in 2021, the clock starts then. Every false certification resets your exposure window.

The Roanoke ring operated from June 2020 to May 2021. The indictment wasnt unsealed until July 2024, more than three years after the last fraudulent act. 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, SIGPR investigators, SBA-OIG, IRS Criminal Investigation, 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: Joseph Cherry provided false information to investigators about his businesses, income, employment, AND criminal record during the investigation. Those false statements became additional evidence against him. Making false statements to federal agents under 18 USC 1001 is itself a crime punishable by up to 5 years.

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, especially in the Rocket Docket where things move fast.

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 Alexandria or Roanoke. Federal court is a completley different system. The conviction rate exceeds 90%.

In Virginia specifically, you need someone who understands the Rocket Docket if your case is in the Eastern District. The fast pace means decisions have to be made quickly. Theres less time to prepare, less time to negotiate, less time for everything. An attorney who doesnt know EDVA’s speed can let critical deadlines slip.

You need someone who knows the judges in both the Eastern and Western Districts of Virginia. Who has relationships with the prosecutors in those offices. Who understands how to present mitigation at sentencing, argue for departures from the guidelines, and structure cooperation agreements that actualy reduce your exposure.

The sentencing guidelines are complicated. Your sentence depends on loss amount, criminal history, wheather you had a leadership role, wheather the offense involved sophisticated means, wheather you abused a position of trust (like Sadie Mitchell), and dozens of other factors. Each factor can add or subtract levels from your offense score.

Ibraheem Samirah got probation. Joseph Cherry got 51 months. Sadie Mitchell got 70 months. The differences werent just about the amounts. They were about criminal history, how the fraud was committed, and how the cases were handled from the beginning.

If your facing PPP fraud allegations in Virginia, your facing potential prison time, hundreds of thousands in restitution, and a felony record that follows you forever. The SIGPR task force is operating in Eastern Virginia. The Western District just indicted 24 people at once. This isnt the time to hope they dont find you. Contact a federal criminal defense lawyer who handles white collar cases in Virginia. In the Rocket Docket, time is not on your side.