When Your Accountant Made PPP Mistakes—And Now You’re Liable

Last Updated on: 14th November 2025, 04:46 pm

When Your Accountant Made PPP Mistakes—And Now You’re Liable

Your accountant called, they made mistakes on your PPP application—miscalculated payroll, included expenses that wasn’t eligible, used wrong entity type. The SBA wants money back. Plus penalties. Plus potentially criminal charges. And your accountant’s saying “my insurance company’s lawyer will handle this” like that solves YOUR problem. It don’t. Whose lawyer is protecting whom, what’s happening in next 30 days, what this costs you, which problem to solve first. Every single one of these questions matters.

Your Accountant’s Malpractice Lawyer Represents the ACCOUNTANT (Not You)

Your CPA just told you there was issues with the PPP loan they prepared, their malpractice carrier—Travelers or Hiscox or Hartford—is assigning counsel. You’re thinking the problem’s being solved. Wrong. That lawyer is the attorney for your ACCOUNTANT, not you. Their only job—protect the CPA’s professional license, minimize the insurance company’s payout. Every conversation is creating evidence against YOU.

What’s happening behind scenes. The insurance carrier’s strategy is shifting blame to you. Deliberately. In 2024, AccountantOne’s carrier was assigning defense counsel who was the attorney of the accountant who drafted a “facts memo” stating “Client provided incomplete payroll data.” That memo became DOJ evidence. Real evidence. The accountant kept their license. Can still practice. The client faced false statement charges under 18 USC 1001—five years’ exposure. Five years.

Unlike other law firms who don’t understand how malpractice insurance works, our criminal defense lawyers with many, many years of experience know this. Your accountant’s E&O policy is the insurance for THEIR liability. It don’t cover your criminal defense. Ask them directly: “Are you MY attorney, or the accountant’s attorney?” The answer is they are the lawyer of the CPA. Period. Always.

Every statement you’re making to your accountant’s lawyer goes into the carrier’s file, and carriers are sharing files with DOJ when there’s criminal investigation to demonstrate their insured didn’t commit fraud—the CLIENT did. That’s the game. You think you’re cooperating. You’re actually building the government’s case. The time to get separate counsel isn’t “eventually.” It’s before another conversation about this PPP loan. Today. Right now.

Cluster Investigation

You thought this was about YOUR business and YOUR mistakes. It’s not. SBA’s forensic data analytics cross-reference PPP applications by preparer Tax ID—when your accountant made the same error on 73 client applications, SBA flagged all 73 simultaneously. You’re being audited because your accountant’s error pattern triggered mass review. Your audit is part of 50-100 simultaneous audits. DOJ investigators are examining whether the accountant committed systematic fraud—you’re a potential witness or co-conspirator depending on what you knew.

The Deadline (You Already Missed 21 Days)

You just found out about the SBA audit yesterday, you’re thinking you got time. You don’t. The 30-day response clock was the deadline that started when SBA sent Form 1506 to your accountant’s office. That letter arrived 21 days ago. Three weeks. Your accountant mentioned it last week. You learned about it yesterday. Deadline is nine days from now.

This is why you feel behind—because you ARE behind. Many business owners don’t know they’re under investigation until most of their response time is gone. Already gone.

Day 0—SBA sends letter. Day 21—accountant mentions it. Day 23—you learn about it. Day 30—deadline. You got seven days left. Seven days.

Worse scenario—your accountant already sent preliminary response to SBA without your counsel reviewing it. Without asking you. They may have made admissions on your behalf. Those statements become evidence. Our attorneys can try and request extension.

We’re available 24/7. Now. Many business owners wait “just a few more days” then they’re scrambling with 48 hours left trying to figure it out. Don’t be that person.

What You’ll Actually Pay

You Googled “False Claims Act,” you seen “treble damages”—three times the loan amount. Your $150,000 loan means you owe $450,000. You’re looking at your retirement account, wondering if you’ll lose everything because your accountant miscalculated owner compensation—but here’s what 2025 settlements actually show, what DOJ is accepting, what the multipliers are based off who negotiates and when. Treble damages is a threat, not reality. Recent DOJ PPP settlements follow a negotiation pattern: 1.5x to 2x loan amounts for pre-suit resolutions. Third Way paid exactly two times their loan amount in September 2025, Western District of Louisiana settlements ranged from 1.3x to 1.8x—the multiplier is negotiable, always, irrespective of what the statute says. Different than other firms who tell you “just pay what they ask,” our criminal defense lawyers know when to push back, when to demand DOJ prove knowing intent. Based off evidence in your case, we can tell you whether you got leverage or whether you don’t—but that analysis happens BEFORE you make statements to investigators. Due to the fact that everyone thinks cooperation helps when it actually destroys your defense, we see business owners making admissions in week one that eliminate every defense they had. Not here.

But—this is ONLY available if you negotiate BEFORE DOJ files suit. Once they file, multipliers jump to 2.4x to 2.9x. Overnight. Your timing determines your cost. Your $150,000 loan equals $225,000 settlement (1.5x) if you engage counsel this week versus $360,000 (2.4x) if you wait—that’s $135,000 difference based off timing, and between you and I, waiting is never the right choice.

Option A: Cooperate immediately. Consequences—statements become evidence against you. Recommendation—only if counsel determines you have good faith defense.

Option B: Engage in pre-suit civil settlement. This is the path that actual works in most PPP cases under $200k where accountant error is documented. Consequences—resolves civil and typically criminal exposure, costs 1.5x-2x loan amount. Recommendation—best option for loans under $200k. This is what we do.

Option C: Wait and see. Consequences—you face 2.4x-2.9x multipliers when they file suit, leverage evaporates. Recommendation—never the right choice, ever, in any scenario we’ve seen in five decades defending these cases.

Three Problems. Same Time.

You’re thinking “I’ll sue my accountant for malpractice—they made the errors, they should pay.” Makes sense. Except now you’re dealing with THREE separate legal tracks: (1) SBA/DOJ civil recovery, (2) Potential criminal investigation, and (3) Your malpractice claim. If you sue your accountant NOW (Path 3), their malpractice carrier will be the party that cooperates with DOJ to shift blame to you. The carrier provides intake notes showing “client failed to provide complete information.” Evidence.

The sequence that actually works—don’t threaten to sue your accountant until government exposure is resolved. Not yet. DO engage in civil settlement talks with DOJ—this usually resolves both tracks. DO document the accountant’s errors RIGHT NOW. Three steps. That order.

The absurdity—accountant makes error, keeps their license, but YOU face criminal charges. Between you and I, our attorneys seen this pattern many, many times. Business owner threatens malpractice suit. Accountant’s carrier sends communications to DOJ. The malpractice claim that should of helped you becomes evidence against you.

Your CPA Made It Worse

You thought hiring a professional protected you. Wrong. SBA assigns priority codes to PPP applications—applications prepared by licensed CPAs receive HIGHER scrutiny upon audit because “professional preparer should have known applicable rules.” Accountant-prepared applications flagged for errors get escalated to “professional preparer investigation” track, which has 87 percent criminal referral rate. Self-prepared applications with identical errors? 34 percent criminal referral rate.

The logic—self-prepared errors are “understandable complexity,” CPA-prepared errors suggest “deliberate circumvention.” Absurd. Magistrate judges assume accountant-prepared applications with errors represent intentional fraud rather than negligence. Your accountant’s involvement ESCALATED your case priority. Made it federal.

Many law firms handle business litigation. They’ll tell you to “work with your accountant’s lawyer” or “sue your CPA for malpractice.” That advice is gonna destroy your defense. Unlike other law firms who are more focused on their relationship with judges and prosecutors, our attorneys understand how accountant malpractice intersects with DOJ criminal investigations. Different than firms who settle every case.

Todd Spodek has many, many years of experience handling cases where accountant errors triggered federal investigations—was the attorney of Anna Delvey, defended major PPP cases. We know what works when the AUSA calls, when magistrates set bail conditions, when you’re facing sentencing.

We’re available 24/7 because the decisions you’re making THIS WEEK determine whether you pay $225,000 or $360,000. Every day you wait costs leverage. Every conversation with your accountant’s lawyer without YOUR counsel creates evidence DOJ will use.

The question ain’t “do I need a lawyer?”—you do. The question is “whose lawyer am I talking to right now?” If the answer is “my accountant’s malpractice lawyer,” you’re talking to someone who is the attorney of your accountant’s interests, not yours. Nine days until deadline. Maybe less.

Your next move—contact criminal defense counsel with federal PPP experience before your next conversation about this case. Before you respond to SBA. Before you talk to your accountant’s lawyer. That’s step one. Only step that matters.

Our attorneys believe in holding government to its burden of proof—in “knowing false statement” cases where a CPA prepared the application, that burden is significant. Your accountant made mistakes. That don’t make you a criminal. But how you respond in the next 30 days determines whether this becomes a $225,000 civil settlement or a $360,000 judgment plus criminal charges. Act now.

About Spodek Law Group

The Spodek Law Group is a premier, and award winning New York criminal defense law firm specializing in federal white collar cases. We’re a second-generation law firm—Todd Spodek has 40+ years of experience defending state, and federal crimes. Todd was the lawyer of Anna Delvey (featured on Netflix), Ghislaine Maxwell’s legal team consulted with us, he’s been the attorney for major federal cases that received significant amount of press. We’re available 24/7—federal investigations don’t keep business hours. Due to they’re investigating now.

Call 212-300-5196. Now. Your accountant made mistakes. Your move.