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PPP Loan Flagged

December 27, 2024

Feeling Frightened About a PPP Loan Flag?

I totally understand how scary it can be to learn that your Paycheck Protection Program (PPP) loan got flagged. It’s that sudden moment of panic—like, oh my goodness, what now? At Spodek Law Group, led by Todd Spodek who’s been featured all over the media (NY Post, Newsweek, Fox 5 New York), we get how overwhelming this is. Our philosophy revolves around white glove service—from using a digital client portal that helps you see each step, to guaranteeing round-the-clock availability if you have urgent questions. If you’re anxious because you’re reading letters from the SBA or the Department of Justice referencing potential fraud, you’re not alone. Honestly, the first instinct can be to freeze or ignore it—but I promise that’s not the way to go.

Why They Flag PPP Loans in the First Place

Government oversight can be intense, especially after congress passed the CARES Act. Agencies like the SBA, plus federal investigators, watch for red flags such as inaccurate payroll records or suspicious spending. Under 18 U.S.C. § 1014, for instance, it’s a crime to knowingly make false statements to get certain loans—this law can potentially apply to PPP funds. I remember that around 2020—though I might be mixing the exact date—there were a bunch of new guidelines about verifying your business’s need for PPP support. Once your loan gets flagged, you might face questions or document requests that feel endless. Our job at Spodek Law Group is to help you navigate this from the moment you realize there’s an investigation.

What Kinds of Issues Spark a PPP Flag?

Sometimes a loan is flagged over something as small as a mismatch between your reported number of employees and the paperwork from your payroll processor. Other times, an auditor will see suspicious use of the loan funds—like if you spent big chunks on non-payroll expenses, which the rules frown upon. In U.S. v. Sperling—a case I recall from around 2021, though I’d have to double-check—that sort of misrepresentation led to some major charges. That’s why it’s important to realize that these investigations can snowball, especially if the government suspects that you did more than an honest mistake. Todd Spodek, a second-generation attorney who’s even been on that Anna Delvey Netflix series, always says: “We look at every angle and dig for ways to show the difference between an error and an intentional fraud.”

The First Step: Figuring Out Where You Stand

The key to any white glove defense is investigating all the facts right away. We often encourage you to gather:

  • Bank statements
  • Payroll ledgers
  • Emails or communications with your accountant
  • Any record of how you used your PPP funds

Our firm’s digital client portal lets you upload everything securely, so we can evaluate the nature of the flag. I know it’s frightening, but skipping this step isn’t a solution. According to the SBA’s internal guidelines—some of which changed mid-2021, I recall—borrowers are supposed to maintain thorough documentation of every penny spent. If you have that, great; if not, we can guide you on how to fill in the gaps.

Why Ignoring the Problem Can Backfire Big

Sometimes people think, “If I just ignore the notices, it’ll go away.” Let’s be honest, that approach rarely helps. Under federal law—including statutes like 31 U.S.C. §§ 3729-3733 (the False Claims Act)—the penalties for failures to respond or correct mistakes can be huge. In United States v. Chan, ignoring repeated requests for clarification led to compounding allegations. I recall Spodek Law Group once helping a client who faced possible civil charges under that statute; Todd Spodek’s defense strategy was to show the client’s misunderstanding rather than willful misrepresentation. By cooperating early and providing strong documentation, you lower your chance of a criminal referral.

Cutting Through the Anxiety: Our Defense Strategy

We know it’s scary to even imagine facing a federal prosecutor or an SBA investigator. But let me reassure you: the top priority is building a strategy that shows, if possible, that any discrepancies were more about confusion than intent to deceive. Spodek Law Group uses a combination of financial experts and diligent fact-checkers to reconstruct the story of your loan use. I’ve seen Todd Spodek on Fox 5 New York explaining how a well-documented approach can be key to persuading authorities to scale back or dismiss certain allegations. We’ll evaluate the nature of the evidence, figure out if an early plea strategy might be wise, or if we should fight to get the case dropped.

Christine Twomey
Christine Twomey
2024-03-21
Just had my Divorce case settled 2 months ago after having a horrible experience with another firm. I couldn’t be happier with Claire Banks and Elizabeth Garvey with their outstanding professionalism in doing so with Spodek Law Group. Any time I needed questions answered they were always prompt in doing so with all my uncertainties after 30 yrs of marriage.I feel from the bottom of my heart you will NOT be disappointed with either one. Thanks a million.
Brendan huisman
Brendan huisman
2024-03-18
Alex Zhik contacted me almost immediately when I reached out to Spodek for a consultation and was able to effectively communicate the path forward/consequences of my legal issue. I immediately agreed to hire Alex for his services and did not regret my choice. He was able to cover my case in court (with 1 day notice) and not only was he able to push my case down, he carefully negotiated a dismissal of the charge altogether. I highly recommend Spodek, and more specifically, Alex Zhik for all of your legal issues. Thanks guys!
Guerline Menard
Guerline Menard
2024-03-18
Thanks again Spodek law firm, particularly Esq Claire Banks who stood right there with us up to the finish line. Attached photos taken right outside of the court building and the smile on our faces represented victory, a breath of fresh air and satisfaction. We are very happy that this is over and we can move on with our lives. Thanks Spodek law 🙏🏼🙏🏼🙏🏼🙏🏼🙌🏼❤️
Keisha Parris
Keisha Parris
2024-03-15
Believe every single review here about Alex Z!! From our initial consultation, it was evident that Alex possessed a profound understanding of criminal law and a fierce dedication to his clients rights. Throughout the entirety of my case, Alex exhibited unparalleled professionalism and unwavering commitment. What sets Alex apart is not only his legal expertise but also his genuine compassion for his clients. He took the time to thoroughly explain my case, alleviating any concerns I had along the way. His exact words were “I’m not worried about it”. His unwavering support and guidance were invaluable throughout the entire process. I am immensely grateful for Alex's exceptional legal representation and wholeheartedly recommend his services to anyone in need of a skilled criminal defense attorney. Alex Z is not just a lawyer; he is a beacon of hope for those navigating the complexities of the legal system. If you find yourself in need of a dedicated and competent legal advocate, look no further than Alex Z.
Taïko Beauty
Taïko Beauty
2024-03-15
I don’t know where to start, I can write a novel about this firm, but one thing I will say is that having my best interest was their main priority since the beginning of my case which was back in Winter 2019. Miss Claire Banks, one of the best Attorneys in the firm represented me very well and was very professional, respectful, and truthful. Not once did she leave me in the dark, in fact she presented all options and routes that could possibly be considered for my case and she reinsured me that no matter what I decided to do, her and the team will have my back and that’s exactly what happened. Not only will I be liberated from this case, also, I will enjoy my freedom and continue to be a mother to my first born son and will have no restrictions with accomplishing my goals in life. Now that’s what I call victory!! I thank the Lord, My mother, Claire, and the Spodek team for standing by me and fighting with me. Words can’t describe how grateful I am to have the opportunity to work with this team. I’m very satisfied, very pleased with their performance, their hard work, and their diligence. Thank you team!
Anthony Williams
Anthony Williams
2024-03-12
Hey, how you guys doing? Good afternoon my name is Anthony Williams I just want to give a great shout out to the team of. Spodek law group. It is such a honor to use them and to use their assistance through this whole case from start to finish. They did everything that they said they was gonna do and if it ever comes down to it, if I ever have to use them again, hands-down they will be the first law office at the top of my list, thank you guys so much. It was a pleasure having you guys by my side so if you guys ever need them, do not hesitate to pick up the phone and give them a call.
Loveth Okpedo
Loveth Okpedo
2024-03-12
Very professional, very transparent, over all a great experience
Bee L
Bee L
2024-02-28
Amazing experience with Spodek! Very professional lawyers who take your case seriously. They treated me with respect, were always available, and answered any and all questions. They were able to help me very successfully and removed a huge stress. Highly recommend.
divesh patel
divesh patel
2024-02-24
I can't recommend Alex Zhik and Spodek Law Firm highly enough for their exceptional legal representation and personal mentorship. From the moment I engaged their services in October 2022, Alex took the time to understand my case thoroughly and provided guidance every step of the way. Alex's dedication to my case went above and beyond my expectations. His expertise, attention to detail, and commitment to achieving the best possible outcome were evident throughout the entire process. He took the time to mentor me, ensuring I understood the legal complexities involved to make informed decisions. Alex is the kind of guy you would want to have a beer with and has made a meaningful impact on me. I also want to acknowledge Todd Spodek, the leader of the firm, who played a crucial role in my case. His leadership and support bolstered the efforts of Alex, and his involvement highlighted the firm's commitment to excellence. Thanks to Alex Zhik and Todd Spodek, I achieved the outcome I desired, and I am incredibly grateful for their professionalism, expertise, and genuine care. If you're in need of legal representation, look no further than this outstanding team.

Nationwide Reach, Personalized Service

We’re not just a local office in NYC—we also have a presence in Los Angeles and represent clients nationwide. That’s huge if you find yourself dealing with a PPP loan flag in a place like Texas or Florida; we can still jump in and help. Because of Todd’s second-generation approach to practicing law, we emphasize transparency in fees, plus we keep you informed every single step of the way. We only take on clients when we’re sure we can genuinely help them—that’s part of our white glove promise. That means if we see a path to success in your PPP case, we’ll fight with everything we’ve got.

Could It Turn Criminal?

Yes, it can. Not trying to scare you, but I want you to be aware that PPP loan flags sometimes escalate to criminal charges, especially if the Department of Justice believes there was deliberate falsification. Under 18 U.S.C. § 1343, wire fraud could be alleged if somebody transmitted misleading docs electronically. We’ve seen clients freak out at the idea of a possible felony prosecution, but the truth is, each case is unique. Our role is to protect your rights and present your situation in the best light possible. In some cases, we might even show that your statements were the product of bad advice from a third party—rather than an attempt to defraud the government.

Step-by-Step: How We Work Through the Concerns

First, we’ll review the flagged items in your PPP documentation.
Then, we gather all relevant paperwork.
Next, we contact the reviewing agency—maybe the SBA Office of Inspector General or the local U.S. Attorney’s office—to understand what exactly triggered the issue.
After that, we’ll sit down with you (often virtually) and get a sense of your timeline and intentions when applying for the loan.

  • Did you assume certain guidelines?
  • Were you rushed?
  • Was your accountant’s advice questionable?

We want to see if there’s a legitimate story that explains seeming irregularities. Todd Spodek strongly believes in a measured, methodical approach—rather than a hasty reaction.

We’re Here 24/7 for Your Peace of Mind

Look, I know you’re worried about what’s next. Maybe you’re losing sleep thinking about your business or your family’s stability. Our team at Spodek Law Group is dedicated to making this as smooth as possible, with constant communication and a digital platform that keeps you updated. Todd Spodek’s been featured, not only in national media, but also in that Netflix documentary about Anna Delvey—he knows how high-profile situations can get. What matters most is we want you to feel heard, understood, and ready to tackle the next step. We encourage you to reach out for a risk-free consultation so we can discuss the best path forward.


DISCLAIMER: This content is for general informational purposes only; it’s not legal advice. Every situation is unique, and we encourage you to consult a licensed attorney regarding your own circumstances.

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CLAIRE BANKS

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