Blog
PPP Loan Flagged
Contents
- 1 Feeling Frightened About a PPP Loan Flag?
- 2 Why They Flag PPP Loans in the First Place
- 3 What Kinds of Issues Spark a PPP Flag?
- 4 The First Step: Figuring Out Where You Stand
- 5 Why Ignoring the Problem Can Backfire Big
- 6 Cutting Through the Anxiety: Our Defense Strategy
- 7 Nationwide Reach, Personalized Service
- 8 Could It Turn Criminal?
- 9 Step-by-Step: How We Work Through the Concerns
- 10 We’re Here 24/7 for Your Peace of Mind
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.
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.