As we noted in our recent civil update, the pace of criminal cases related to Paycheck Protection Program (PPP) loan fraud has not slowed. Here are a few significant cases from the last several months.
Co-Founder of a PPP Lender Service Provider (November 2025)
In November 2025, the co-founder of a PPP lender service provider was sentenced to ten years in prison and ordered to pay over $63 million in restitution for her role in a scheme to fraudulently obtain over $63 million in PPP loans. A jury had convicted the co-founder of conspiracy to commit wire fraud. According to evidence at trial, the company was ostensibly formed to assist small businesses, but the co-founder and her co-conspirators fabricated payroll records, tax documents, and bank statements to inflate loan amounts, and then collected kickbacks from borrowers as a percentage of funds received. The case is notable because it targets the lending infrastructure itself, instead of a borrower.
Louisiana Resident (April 2026)
In April 2026, a Jefferson Parish, Louisiana resident was sentenced to 70 months in prison (46 months for two counts of wire fraud, plus 24 consecutive months for two counts of aggravated identity theft) and ordered to pay $342,032 in restitution. According to court documents, the defendant allegedly obtained PPP loans using falsified tax forms and fraudulently obtained Emergency Rental Assistance Program funds using the identities of purported renters and, at times, third parties whose identities she allegedly misappropriated. The case was prosecuted under the newly formed National Fraud Enforcement Division, which seeks to “zealously investigate and prosecute those who steal or fraudulently misuse taxpayer dollars.”
Missouri Business Owner (April 2026)
In April 2026, the owner of two Missouri LLCs pleaded guilty to wire fraud for fraudulently obtaining two PPP loans totaling approximately $92,233. According to DOJ’s press release, the defendant submitted loan applications containing fabricated payroll figures and gross receipts for both companies, and the corresponding Schedule C filed with one application had never been submitted to the IRS. The case, investigated by IRS Criminal Investigation, demonstrates that even modest loan amounts can be subject to DOJ scrutiny.
Georgia Businessman (January 2026)
In January 2026, a Georgia man was sentenced to over fourteen years in prison after a jury convicted him of fraudulently obtaining a $9.6 million PPP loan and filing fraudulent tax returns that generated a $3.4 million IRS refund. According to evidence presented at trial, the defendant submitted a PPP loan application falsely certifying that his gold mining business had 493 employees and nearly $4 million in average monthly payroll. The fabricated payroll records listed celebrities and fictional characters as employees. The defendant used the proceeds to purchase a $1.7 million mansion, luxury vehicles, and other personal items. The court ordered forfeiture of these assets and restitution of at least $3.37 million. This case represents one of the largest single-defendant PPP fraud cases to date.
Illinois Tax Preparer (March 2026)
In March 2026, a tax preparer from Illinois was sentenced to ten years in prison and ordered to pay $14 million in restitution for submitting more than 1,500 fraudulent PPP loan applications that caused the government to disburse at least $14 million. According to the government, the defendant recruited individuals to provide their personal identifying information and then submitted applications containing misrepresentations about their operations, payroll, and income. For each successful fraudulent loan, the defendant allegedly received $1,000 to $4,000 in kickback payments. The government alleged that he funneled hundreds of thousands of dollars to foreign financial institutions and used fraud proceeds to fund a lavish lifestyle in the United States. The sentencing judge remarked that this type of fraud “hurts ultimately the people who really needed the funds.” The case was prosecuted under the U.S. Attorney’s Office for the Northern District of Illinois’s renewed focus on COVID-19 fraud.
Colorado Identity Theft Fraud Ring (April 2026)
In April 2026, an Atlanta, Georgia man was sentenced to seventeen years in prison—one of the longest PPP fraud sentences to date—for leading a fraud ring that allegedly applied for more than $90 million in government benefits and stole over $7.6 million from the PPP, Economic Injury Disaster Loan program, multiple state unemployment insurance programs, and tax refunds. According to the government, the defendant and his co-conspirators used the stolen identities of more than 1,000 victims to obtain these benefits. The sentencing was announced by DOJ’s National Fraud Enforcement Division as part of a coordinated nationwide enforcement action. A co-defendant was sentenced to 57 months for his role in the scheme. This case illustrates both the severity of sentences available for large-scale, multi-program fraud, and the role of the National Fraud Enforcement Division in coordinating prosecutions.
Fresno Trucking Company Owner (March 2026)
In March 2026, a Fresno, California man was sentenced to fourteen months in prison and ordered to pay a $100,000 criminal fine after pleading guilty to theft of government property for obtaining over $1 million in PPP loans by falsifying employee records and inflating wages for two family-operated trucking businesses. According to the government, the defendant used the fraudulently obtained funds to purchase agricultural land rather than for payroll expenses. The defendant pleaded guilty and repaid the stolen funds prior to sentencing. The case demonstrates that even defendants who make such a repayment still face prison time.
Illinois PPP Application Scheme (June 2026)
In June 2026, a Midlothian, Illinois man was sentenced to four years in prison for submitting and teaching others to submit over 100 fraudulent PPP loan applications seeking more than $2 million. According to the government, between March and June 2021, the defendant and two accomplices recruited applicants and submitted applications containing false statements about their purported sole proprietorships’ operations, employees, and revenues. The trio allegedly collected kickbacks of $5,000 to $10,000 from each applicant. One co-defendant was sentenced to 18 months in prison; the other awaits sentencing.
Massachusetts CPA (July 2026)
In July 2026, a Massachusetts CPA was sentenced to two months in prison for conspiracy to defraud the United States and two counts of PPP loan fraud. According to the government, the defendant and a co-conspirator created a scheme to provide hidden compensation—totaling over $1.6 million—to an employee through off-books payments, rent-free housing, tuition payments, and personal expenses charged to corporate credit cards. In 2020, the pair allegedly submitted fraudulent PPP applications for two companies and obtained $179,900 in pandemic relief funds, which the defendant allegedly used in part to fund the hidden compensation payments. The defendant was ordered to pay over $1.3 million in restitution to the IRS, Massachusetts Department of Revenue, and SBA. The case is a reminder that PPP fraud can intertwine with other white-collar schemes—here, tax fraud and concealed compensation.
Key Takeaways
Here are some key takeaways:
- DOJ criminal enforcement targets PPP fraud regardless of dollar amount; these schemes involved under $100,000 to those exceeding $60 million.
- The DOJ’s National Fraud Enforcement Division is playing an increasingly prominent role in coordinating PPP prosecutions, signaling a shift toward centralized, nationwide enforcement actions rather than purely district-level cases.
- Fraud facilitators, including lender service providers, tax preparers, and application coaches, are facing sentences as severe as, or more severe than, the borrowers they assisted, reflecting DOJ’s focus on dismantling the infrastructure that enabled PPP abuse.