What Happens If the SBA or FBI Contacts Me About a COVID Loan?
Federal agents are still working through COVID-era Small Business Administration loans years after the programs closed. A recent federal plea in Fort Myers involved wire fraud and illegal monetary transactions tied to an Economic Injury Disaster Loan, along with forfeiture of the loan proceeds. If the SBA Office of Inspector General, the FBI or IRS Criminal Investigation has contacted you about a PPP or EIDL loan, or you have received a federal target letter, the safest step is to speak with an attorney before answering questions.
Attorney Ron Frey of The Frey Law Firm, LLC has over 20 years of experience handling state and federal criminal cases and represents people under federal investigation in the Middle District of Florida. Call or text (813) 775-2276 for a free, confidential initial consultation by phone, video or in person.
What COVID Loan Fraud Cases Usually Involve (PPP and EIDL)
During the pandemic, the Small Business Administration offered Paycheck Protection Program (PPP) loans and Economic Injury Disaster Loans (EIDL) to help businesses stay open. Years later, federal prosecutors are still charging people over how those applications were filled out and how the money was spent.
In general terms, these cases often focus on statements in the loan paperwork, such as who owned the business, how many employees it had, what revenue it reported, or whether the funds were used for allowed business expenses. A loan that looked routine at the time can come back into view when bank records, tax filings or a tip do not match what was submitted. Related Florida charges involving relief or grant programs are covered in our post on organized scheme to defraud and relief program fraud. This post focuses on the federal COVID loan path, including PPP and EIDL.
Wire Fraud and Illegal Monetary Transactions (18 U.S.C. §§ 1343 and 1957)
Two statutes show up often in federal COVID loan cases. Wire fraud under 18 U.S.C. § 1343 generally involves a scheme to obtain money or property by false pretenses when interstate wires, such as online applications or electronic deposits, are used. Illegal monetary transactions under 18 U.S.C. § 1957 generally involve knowingly engaging in a financial transaction with more than $10,000 in proceeds from specified unlawful activity.
In a loan case, prosecutors may treat the application and the transfer of funds as the wire fraud, and later transfers, cash withdrawals or purchases as the monetary transactions. Those are separate theories, so the same loan can support more than one count. How the facts map onto either statute depends on the paperwork, the bank trail and what investigators can prove. Our white collar and financial crimes page covers how fraud cases in Tampa Bay often move between investigation and court.
Forfeiture of Loan Proceeds and Property
Federal COVID loan cases often include a forfeiture demand. In plain terms, the government seeks to take money or property it says came from the offense, or that was bought with those proceeds. That can mean cash still in an account, vehicles, or other assets tied to how the loan funds were spent.
Forfeiture can move on a civil track, a criminal track, or both, and it can start while the criminal case is still open. Assets may be seized early in an investigation and later forfeited by court order or by agreement. Whether a particular transfer or purchase is subject to forfeiture turns on the paper trail and the legal theory the government uses. Nothing here predicts how any one case will end. The point is that the money and property side of a COVID loan investigation deserves attention from the start, not only after charges are filed.
Who Investigates: SBA OIG, FBI, and IRS-CI
COVID loan cases are usually investigated by one or more federal agencies before a charge is filed. The SBA Office of Inspector General looks at loans the Small Business Administration made. The FBI often handles wire fraud and related financial schemes. IRS Criminal Investigation may get involved when tax returns, reported income or how funds moved through accounts are part of the picture.
These agencies share information and sometimes work together. A call or visit from one of them does not mean a charge has already been filed, but it does mean the inquiry is serious. Our page on federal agency investigations in Tampa explains how those contacts usually work and why it helps to have a lawyer involved early. Tampa Bay federal cases are generally prosecuted in the Middle District of Florida.
If Agents Contact You or You Get a Target Letter
If an agent from SBA OIG, the FBI or IRS-CI calls, emails or comes to the door about a PPP or EIDL loan, the safest step is to politely decline to answer questions and speak with an attorney first. The same applies before agreeing to a search, handing over phones, computers or bank records, or signing any form that waives rights.
A federal target letter is different from a casual request for records. It means a prosecutor has identified you as a likely defendant in a grand jury investigation. Our post on federal target letters in Florida explains what that letter usually means in the Middle and Southern Districts. Statements to agents, and false statements on a loan application itself, can also support separate charges under 18 U.S.C. § 1001 when the government can prove a false material statement. Talk with a lawyer before you talk with investigators.
Don’t Rely on the Internet or AI for Your Case
Online articles and AI chatbots can summarize what PPP or EIDL programs were, or what wire fraud means in general. They do not know your loan file, which agency is asking questions or what documents the government already has. AI tools can also give answers that sound confident and still be wrong.
Typing details about a loan, a bank account or a conversation with an agent into a chatbot or a search box is not private. Those words can be stored, shared or produced later. Use the internet for background, and bring the actual facts to a lawyer who can look at your situation under current federal law.
COVID Loan Fraud FAQ
What should I do if SBA OIG or the FBI contacts me about a PPP or EIDL loan?
Politely decline to answer questions and speak with an attorney first. Talk with counsel before handing over devices or records.
Can I be charged with wire fraud over a COVID loan?
Yes, when prosecutors believe an online application or electronic transfer was part of a scheme to obtain loan funds by false pretenses. Wire fraud under 18 U.S.C. § 1343 is one of the statutes commonly used in these cases. The facts of each loan control.
What is an illegal monetary transaction in a loan case?
Under 18 U.S.C. § 1957, it generally means knowingly running a financial transaction with more than $10,000 in proceeds from certain crimes. In a COVID loan case, that can involve later transfers, withdrawals or purchases after the loan funds arrived.
Will the government try to take my property?
Federal COVID loan cases often include forfeiture of alleged proceeds or property bought with those funds. Whether a specific asset is subject to forfeiture depends on the trail of money and the legal theory used. Speak with an attorney about your situation.
What if I also face a state relief-program charge?
Florida and the federal government can each pursue their own case. See our posts on state and federal charges and organized scheme to defraud and relief program fraud for the state-law side.
Is a target letter the same as being charged?
No. A target letter means a federal prosecutor has identified you as a likely defendant in a grand jury investigation. Charges may follow, but the letter itself is not an indictment. Read more in our post on federal target letters in Florida.
Talk With Attorney Ron Frey
Every case is different. Whether a COVID loan inquiry stays at the audit stage, becomes a grand jury investigation or leads to charges depends on the paperwork, the bank records and the decisions prosecutors make along the way. Some people also face related state charges involving relief programs; our post on state and federal charges for the same conduct covers how those two systems can overlap.
Attorney Ron Frey of The Frey Law Firm, LLC represents people under investigation and charged in federal court in the Middle District of Florida, including white collar and financial crime matters. If you or a friend or family member has been contacted about a PPP or EIDL loan, reach out before talking to agents.
Call or text (813) 775-2276 for a free, confidential initial consultation by phone, video or in person.