What Percentage of PPP Fraud Gets Caught?

What Percentage of PPP Fraud Gets Caught? You’re Asking the Wrong Question

You’re searching for a percentage hoping it’s low. Hoping there’s a gap you might slip through. Hoping that “caught” is something that happens randomly, like a lottery in reverse – and maybe you won’t be picked. That’s not how it works. The percentage of PPP fraud that gets caught isn’t a mystery. It’s 100%. Detection already happened. The question you should be asking is what percentage gets prosecuted – and that number is climbing every month toward every viable case by 2030.

Welcome to the Spodek Law Group resource on what PPP fraud detection actually means. Our goal is to help you understand something the statistics don’t reveal: detection isn’t an event that happens to some borrowers and not others. It’s a database comparison that already happened to everyone. The SBA flagged over 669,000 loans as potentially fraudulent using automated data analytics. The GAO flagged 3.7 million recipients with warning signs. Every loan passed through machine learning tools and automated screening before forgiveness was granted. If your numbers didn’t match what you filed with the IRS, you were already “caught” years ago. You just haven’t been prosecuted yet.

That’s the reality behind “what percentage gets caught.” At Spodek Law Group, Todd Spodek and our federal defense team understand the difference between detection and prosecution. Detection is automatic, comprehensive, and complete. Prosecution is a queue. The question isn’t whether you’ll be caught – you already were. The question is whether you’ll prepare a defense before they reach your position in line.

The Wrong Question Everyone Asks

Heres why “what percentage gets caught” is the wrong question. It assumes detection is random. It assumes some people commit fraud and get away with it while others get unlucky. It assumes “caught” means someone noticed, investigated, and found evidence. None of that is how PPP fraud detection actualy works.

The evidence already exists. Your PPP application says you had X payroll. Your IRS 941 filings say you had Y payroll. The SBA has access to both. The comparison happens automaticaly. If X and Y dont match, your flagged. Not by a suspicious agent. Not by a tip from a competitor. By an algorithm that noticed the discrepancy before any human ever looked at your file.

Think about what that means. You created the evidence of fraud with your own hands when you submitted the application. The government didnt have to gather anything. They just had to compare what you already gave them. The “percentage caught” isnt a calculation of whos unlucky enough to get investigated. Its 100% – becuase the comparison happened to everyone. The only variable is prosecution timing.

100% Detection Rate: How The System Actually Works

Heres how detection actualy functions. According to the GAO’s investigation into SBA fraud detection, all PPP loans passed through the SBA’s automated screening tool, aggregate review tool, and machine learning tool prior to forgiveness being granted. Every single loan. As loans passed through each tool, they were flagged for indications of potential fraud, which triggered manual review.

OK so think about what that means. There is no loan that wasnt screened. There is no application that wasnt compared against federal databases. There is no borrower who escaped the automated analysis. The question of “what percentage gets caught” assumes some loans slipped through. They didnt. Every loan was analyzed. Every discrepancy was flagged. Every flag was recorded.

The system used data analytics to examine anomolies. It used machine learning to identify files needing human review. It cross-referenced information across agencies. The Pandemic Response Accountability Committee estimates that pre-award vetting using data analytics could have prevented over $79 billion in potentialy fraudulent payments – which tells you exactaly how much the system CAN detect when it looks. It looked. Detection happened. Prosecution is whats still unfolding.

669,000 Flagged, 3.7 Million With Warning Signs

Heres the scale of what “caught” actualy means. The SBA referred over 669,000 potentialy fraudulent PPP and COVID-EIDL loans to the Office of Inspector General for investigation. Not after tips or complaints. After automated data analytics. Nearly 700,000 loans flagged by algorithms that noticed discrepancies between what borrowers claimed and what federal databases showed.

But thats just the referrals. The GAO flagged 3.7 million recipients of SBA funds as having warning signs consistant with potential fraud. These “indicators” arnt proof of fraud – there referrals for further review and possible law enforcement investigation. But they show the scope of detection. 3.7 million people triggered warning signs. The system noticed. The flags were recorded.

Think about that math. If your searching for “what percentage gets caught” hoping the answer is 10% or 20%, your looking at the wrong number. The detection percentage is effectivley 100%. The prosecution percentage so far is much lower – but thats becuase there working through a queue of 669,000 flagged loans. Your position in that queue isnt safety. Its timing.

The question isnt whether you were caught. Its whether theyve reached your file yet.

The Quote That Gave False Hope

Heres something that gets misinterpreted constantley. A U.S. Attorney admitted on record: “I think theres going to be a percentage that we probly will never catch.” People read that and feel relief. They assume it means some fraud is undetectable. That some percentage will slip through forever. Thats not what it means.

Read it again. The quote is about prosecution, not detection. The government knows who committed fraud. They have the flagged loans. They have the referrals. They have the data analytics results. What they lack is prosecutorial resources. There arnt enough federal prosecutors to bring charges against 669,000 people. The quote acknowledges resource constraints, not detection failures.

OK so heres what that actualy means for you. The “percentage they never catch” refers to cases they cant prosecute before the statute expires in 2030. Not cases they dont know about. Every viable case is in the queue somewhere. The question is wheather prosecutors reach your position before the clock runs out. And Congress extended the statute to 10 years precisley to give them more time to work through that queue.

The false hope from that quote has caused alot of people to delay seeking legal counsel. They assume there invisible. There not. There just further back in line. And the line is moving.

$1.2 Billion Recovered Out of $64 Billion: The Prosecution Gap

Heres a number that looks encouraging until you understand what it means. Using the False Claims Act and FIRREA, the government and whistleblowers have resolved cases covering over $186 million in PPP fraud. Combined with criminal recoveries, approximately $1.2 billion has been recovered. In the context of an estimated $64 billion in total fraud, thats less then 2%.

People see that 2% and think: “Only 2% of fraud gets caught.” Thats the wrong interpretation. The 2% represents cases that have been fully prosecuted, resolved, and had funds recovered. It dosent represent the detection rate. It represents how far the government has progressed through a massive enforcement pipeline.

Think about the math again. 669,000 loans flagged. 3,096 defendants charged so far. Thats 0.46% prosecuted – not 0.46% detected. The other 99.5% arnt undetected. There in the queue. There under investigation. There sealed in qui tam lawsuits. There waiting for prosecutors to reach them. The low prosecution percentage isnt evidence that most fraud goes unnoticed. Its evidence that enforcement takes time.

The Taxpayers Against Fraud Education Fund noted: “There is still a lot more work to be done.” That work is ongoing. The queue is moving. The percentage prosecuted is climbing every month. The destination is every viable case before the statute expires.

97.4% Conviction Rate: What Happens When They Reach You

Heres what the prosecution numbers actualy show. According to IRS Criminal Investigation’s five-year report, the conviction rate in prosecuted COVID fraud cases is 97.4%. Once they charge you, you lose. Almost every time.

Why is the rate so high? Becuase the government dosent charge cases they cant win. By the time your indicted, the investigation has been running for months or years. The evidence is already collected. Your bank records show where PPP funds went. Your tax returns show what your actual payroll was. The discrepancy that flagged your loan is documented. The case is built before you know about it.

What this means practically: if your calculating odds of escape, the “percentage caught” question misses the point. The relevant numbers are: 100% detection rate, unknown percentage prosecuted by 2030, and 97.4% conviction rate once prosecuted. Being detected but not yet prosecuted isnt safety. Its a countdown.

At least 2,393 defendants – almost 95% – have been found guilty of fraud-related charges involving pandemic relief programs as of December 31, 2024. Of those convicted, 81% recieved prison time. The prosecution percentage may be low. The conviction percentage once prosecuted is nearly absolute.

The 10-Year Extension: Buying Time to Prosecute Everyone

Heres why the statute extension matters. In 2022, Congress extended the statute of limitations for PPP fraud from 5 years to 10 years. That wasnt routine. That was a deliberate decision to give prosecutors more time to work through the backlog of flagged cases. The government recognized they couldnt prosecute 669,000 flagged loans in 5 years. So they bought more time.

Think about what that signals. If the government was content to let most fraud go unprosecuted, they wouldnt need a 10-year statute. The extension exists becuase they intend to file every viable case. Not most cases. Every case where the evidence supports prosecution. The 10 years is the timeline for working through the queue – not evidence that most fraud will escape.

If you took a first-draw loan in April 2020, the government has until April 2030 to charge you. If you took a second-draw loan in May 2021, they have until May 2031. Thats 5-6 more years of enforcement activity. The percentage prosecuted so far is just the beginning. The percentage prosecuted by statute expiration could be dramaticaly higher.

The government has publically stated its goal: file every viable case before time runs out. The 10-year extension gives them runway to do exactaly that.

The statute extension wasnt mercy. It was the government buying time to catch up.

Detection vs. Prosecution: The Gap That Creates False Hope

Heres the distinction that trips people up. Detection and prosecution are different things on different timelines. Detection happens automaticaly, instantly, and comprehensivley through database comparisons. Prosecution happens manualy, slowly, and selectivley through a queue system with limited resources.

When people search “what percentage gets caught,” there conflating these two concepts. They see low prosecution numbers and assume low detection. But detection already happened. Every loan was screened. Every discrepancy was flagged. Every referral was made. The low prosecution percentage reflects where the government is in processing a massive queue – not what they know.

The gap between detection and prosecution is where false hope lives. People mistake the delay for an escape. They assume being unprosecuted means being undetected. They calculate odds based on how many people havent been charged yet. But those unprosecuted people arnt invisible. There in files. There in databases. There in sealed qui tam lawsuits. There just waiting there turn.

At Spodek Law Group, Todd Spodek and our team of federal defense attorneys understand this distinction intimatley. We’ve seen clients who assumed they were safe becuase years passed without consequences. Then the subpoena arrived. The investigation had been running the whole time. They just didnt know about it. The “percentage caught” they were hoping was low turned out to be 100%. The question was always prosecution timing, not detection probability.

The Whistleblower Factor: Detection You Cant Control

Heres something the detection statistics dont capture. Whistleblowers. Under the False Claims Act, anyone with knowledge of your fraud can file a qui tam lawsuit and recieve 15 to 30 percent of whatever the government recovers. Your former bookkeeper. Your ex-partner. Your disgruntled employee. Even your ex-spouse who saw your financial records during the marriage. Any of them can trigger an investigation you never see coming.

The SBA OIG has recieved nearly 750,000 referrals of suspected identity theft and fraud related to the PPP program. Not all of those are whistleblower cases – many are automated flags. But some are. And whistleblower cases proceed under seal, meaning you wont know about them for months or years while the government investigates wheather to intervene.

Think about everyone who knows the truth about your PPP application. Anyone who saw your real payroll numbers. Anyone who helped prepare the application. Anyone who noticed the discrepancy between what you claimed and what actualy happened. Any of those people could file a qui tam suit. There financially incentivized to do so. And you would have no idea until the seal is lifted and the case becomes public.

The percentage you calculate based on prosecution statistics dosent account for this. Detection through automated database comparison is one layer. Detection through whistleblower reports is another. Between the two, the “undetected” category is effectivley empty. The question is always prosecution timing – not wheather someone knows.

What The Percentage Looks Like By 2030

Heres what the enforcement trajectory suggests. Right now, aproximately 0.5% of flagged loans have resulted in charges. Thats the number people focus on when asking “what percentage gets caught.” But that number reflects where we are in a 10-year enforcement window – not where well be when it ends.

If the government prosecutes at the same rate for the next five years, the percentage charged could reach 1-2% of flagged loans. If they accelerate – and evidence suggests there accelerating – it could be higher. The stated goal is every viable case. With 669,000 flagged loans and unlimited political will to pursue pandemic fraud, the final percentage prosecuted could be significantely higher then anything weve seen so far.

Consider the trend. Sentences are 40% longer then they were in 2021-2022. Conviction rates hold steady at 97%. New indictments come almost weekly. The machinery of prosecution is getting more efficent, not less. The percentage prosecuted per year is climbing. By 2030, the “what percentage gets caught” question will have a very different answer then it does today – and not in a direction that favors anyone hoping to escape.

The people who ask “what percentage gets caught” in 2025 are calculating based on incomplete data. The enforcement is ongoing. The queue is moving. The final number wont be known until the statute expires. Betting on a low percentage based on current prosecution rates is betting that the government will slow down. Nothing in the data suggests they will. In fact, the data suggests the opposite. Prosecutors are getting more efficent. Judges are less tolerant. Task forces are fully operational. The percentage prosecuted per year is increasing, not decreasing.

The Only Percentage That Matters

Heres what all these statistics actualy mean for you. If your searching for “what percentage gets caught” hoping to calculate odds of escape, your asking the wrong question. The detection rate is effectivley 100%. The evidence exists. The comparisons happened. The flags were generated. You were “caught” the moment the databases noticed your numbers didnt match.

The only percentage that matters now is your percentage chance of getting ahead of prosecution. Clients who come to us before there name appears in indictment statistics have options that clients who wait dont have. There may be paths to voluntary disclosure. There may be ways to cooperate that reduce exposure. There may be defenses that need to be preserved before investigators make contact. The goal isnt to escape detection – thats already happened. The goal is to position yourself before prosecution reaches your file.

The reality is this. Somewhere in federal databases, your loan was analyzed. If your numbers matched what you filed with the IRS, your fine. If they didnt, you were flagged. You may be in the 669,000 referrals. You may be in the 3.7 million with warning signs. You have no way of knowing – and neither does anyone else until the subpoena arrives. What you can control is what you do now.

If your reading this becuase your worried about your PPP application, if you know your numbers might not withstand comparison, if youve been searching for percentages hoping to find reassurance that most fraud goes unnoticed – call us at 212-300-5196. The consultation is confidential. We can help you understand what detection means, what prosecution timelines look like, and what options exist before your position in the queue reaches the front.

The percentage of PPP fraud that gets caught isnt a mystery. Its 100%. The question is what you do about it.

Detection already happened. The only question is when prosecution reaches you – and wheather youll be ready.