The Paycheck Protection Program (PPP), part of the CARES Act, was created to help small businesses in Alabama and across the U.S. survive the COVID-19 economic shutdown. Unfortunately, due to its rapid rollout, the program became a target for both abuse and overzealous federal investigations.
If you’re under investigation for PPP loan fraud in Alabama, you could be facing serious federal criminal charges. These cases are aggressively prosecuted by the U.S. Department of Justice and Alabama’s federal U.S. Attorney’s Offices. Understanding how these cases work—and what to do next—could make the difference between prison time and a second chance.
What Is Considered PPP Loan Fraud?
PPP loan fraud generally involves misrepresenting information to obtain or use the funds in ways not permitted under the program. Some of the most common allegations include:
- Falsified payroll or employee numbers
- Fake or inactive business entities
- Misuse of funds for personal purchases
- Submitting multiple applications under different business names
- Using fabricated tax or banking records
In short, if the government believes you knowingly misled the SBA or your lender, you may be investigated or indicted for federal fraud.
Federal Charges in PPP Fraud Cases
In Alabama, PPP fraud charges are typically brought under serious federal statutes, including:
- 18 U.S.C. § 1343 – Wire Fraud
- 18 U.S.C. § 1344 – Bank Fraud
- 18 U.S.C. § 1001 – False Statements
- 18 U.S.C. § 371 – Conspiracy
- 18 U.S.C. § 1956 – Money Laundering
Each of these charges carries severe penalties. For example, wire fraud alone can result in up to 20 years in federal prison per count.
PPP Fraud in Alabama: Real Examples
Federal prosecutors in Alabama have already charged multiple individuals for PPP-related offenses. Some were accused of:
- Creating fake businesses and inflating payroll
- Applying for loans under multiple names
- Spending PPP funds on luxury items and personal travel
The FBI, IRS-CI, and SBA OIG often work together on these cases. Investigations may begin quietly—then result in an arrest, indictment, or federal target letter.
If you’ve received a target letter, don’t panic—but don’t delay either. Learn more about what a federal target letter means and how to respond:
👉 What Is a Federal Target Letter and What Should You Do If You Receive One?
What Happens If You’re Investigated?
Federal PPP fraud investigations in Alabama may start with:
- A subpoena for your business records
- Contact from a federal agent (FBI, IRS, SBA)
- A grand jury inquiry
- A formal target letter
- A surprise arrest or indictment
You may not even realize you’re under investigation until it’s already well underway. If this happens, do not talk to investigators without a lawyer present. Anything you say—no matter how innocent—can be used against you in court.
Federal PPP Fraud Defense Strategies
Our approach to defending PPP fraud cases focuses on:
- Intent: Many people applied for PPP loans in good faith but misunderstood confusing rules. A mistake is not the same as criminal intent.
- Insufficient Evidence: We challenge the government’s documentation, timelines, and witness credibility.
- Unlawful Search or Seizure: If evidence was obtained illegally, we’ll move to have it suppressed.
- Restitution and Resolution: In some cases, we can negotiate a resolution without felony charges or jail time—especially if funds have been repaid.
Should You Hire a Federal Criminal Defense Lawyer?
Absolutely. Federal prosecutors are experienced, well-resourced, and focused on sending a message. You need an attorney who is equally experienced in federal white-collar crime defense, understands PPP loan structures, and can navigate U.S. District Court procedures.
Visit our Criminal Defense page to learn more about how we fight federal charges in Alabama.
Take Action Before It’s Too Late
If you suspect you’re being investigated—or if you’ve already been contacted by agents—don’t wait to get help. At The Law Office of Johnathan L. Williams, we’ve helped individuals across Alabama defend themselves against aggressive federal prosecutions, including PPP fraud, wire fraud, and other white-collar offenses.
Call (205) 573-4752 now or visit johnathanlwilliams.com to schedule a confidential consultation.