Written By Zachary Newland, Founding Partner. Last updated August 5, 2026.

Corporate Investigations and PPP Loan Fraud: What Your Business Needs to Know

If your company received a Paycheck Protection Program (PPP) loan and federal investigators are now asking questions, the stakes are incredibly high. Corporate investigations into PPP loan fraud can result in criminal charges carrying penalties of up to 30 years in prison and millions of dollars in fines under wire fraud, bank fraud, and false-statement statutes. Acting before you respond to any investigator, subpoena, or document request is the single most important step you can take to protect your business, your officers, and your employees.

On This Page

• What Corporate Investigations into PPP Loan Fraud Involve
• Federal Statutes Used in PPP Fraud Prosecutions
• Which Federal Agencies Investigate PPP Loan Fraud
• Document Preservation and Attorney-Client Privilege
• Steps to Take When Your Company Faces a PPP Investigation
• How Evergreen Attorneys Can Help
• Frequently Asked Questions

What Corporate Investigations into PPP Loan Fraud Involve

Corporate investigations in the PPP loan fraud context are internal or external inquiries into how a business applied for, received, and used Paycheck Protection Program funds. Note that in this article we are talking about PPP loan fraud, but the same principles generally apply to investigations into EIDL loan fraud cases as well.

Investigators examine financial records, payroll data, certifications made to lenders or the SBA, and compliance with the U.S. Treasury and SBA Interim Final Rule for PPP. The goal of the federal investigators is to determine whether any conduct could support federal criminal charges.

These investigations arise in two ways. First, federal agencies may open an external investigation based on referrals from lenders, whistleblowers, or data-matching programs that flag anomalies in PPP applications and forgiveness requests. Second, a company’s own leadership or counsel may initiate an internal investigation to assess exposure before or after receiving a government inquiry. In either case, the investigation typically focuses on whether certifications about employee counts, payroll expenses, and use of loan proceeds were accurate and made in good faith.

The critical point for any business is that PPP-related corporate investigations are not civil audits. They are directly tied to federal criminal statutes, and the information gathered during these inquiries can be used to support federal criminal indictments. Understanding that distinction shapes every decision your company makes from the moment it learns of an investigation.

Colorado PPP Fraud Task Force

The United States Department of Justice established a COVID-19 Strike Force in the District of Colorado intended to specifically target and charge individuals accused on PPP loan fraud. According to the DOJ, as of August 2023:

The Justice Department has [ ] seized over $1.4 billion in COVID relief funds . . . and charged over 3,000 defendants with crimes in federal districts across the country.

Many of these cases are being prosecuted in the District of Colorado, even if the defendant did not reside or have their business in Colorado. That is because many SBA loans were funded through banks in Colorado which, in the federal justice system, is enough to give the District Court of Colorado jurisdiction.

Federal Statutes Used in PPP Fraud Prosecutions

There is no PPP-specific criminal statute. Federal prosecutors rely on general fraud and false-statement laws to charge PPP-related conduct. Three statutes appear most frequently:

• 18 U.S.C. § 1343 (Wire Fraud): Criminalizes the use of wire communications to execute a scheme to defraud. Because PPP applications were submitted electronically through lender portals and SBA systems, wire fraud is the most common charge in PPP cases. Maximum penalty: 20 years in prison per count, or 30 years when the fraud affects a financial institution.
• 18 U.S.C. § 1344 (Bank Fraud): Applies when a borrower obtains PPP funds through false representations to a financial institution. Maximum penalty: 30 years in prison and a $1 million fine per count.
• 18 U.S.C. § 1014 (False Statements to a Financial Institution): Targets borrowers who misrepresent payroll, revenue, or other material facts on PPP loan applications. Maximum penalty: 30 years in prison.

Prosecutors often charge multiple counts under more than one statute. When a company’s officers or employees are individually charged, each person faces separate exposure. The government may also pursue forfeiture of PPP proceeds and restitution to the SBA or lender. Businesses should understand that this is a federal fraud crimes defense matter, not an administrative compliance issue.

Which Federal Agencies Investigate PPP Loan Fraud

Multiple federal agencies coordinate PPP loan fraud investigations. Understanding which agencies are involved helps a defense team anticipate investigative steps and prepare targeted responses.

The Department of Justice leads criminal prosecutions through U.S. Attorneys’ Offices across the country. The Small Business Administration Office of Inspector General (SBA OIG) investigates suspected fraud in PPP applications and use of funds. IRS Criminal Investigation brings financial forensic capability, particularly when tax returns or payroll records are central to the alleged fraud. The FBI may be involved when the case involves complex schemes, multiple defendants, or large dollar amounts.

These agencies frequently work together through COVID-19 fraud strike forces and task forces. They share data, issue subpoenas, conduct interviews, and coordinate with lenders. A company that receives contact from any one of these agencies should assume the investigation may involve others. Receiving a federal grand jury subpoena or a federal target letter in this context signals that the investigation has advanced significantly.

Document Preservation and Attorney-Client Privilege

Document preservation is one of the most consequential early obligations in any PPP corporate investigation. The moment a company has reason to anticipate government scrutiny, it must take affirmative steps to preserve all potentially relevant records. Failing to do so can result in spoliation sanctions and, in extreme cases, obstruction charges under 18 U.S.C. § 1519.

Preservation extends beyond formal financial records. Companies must retain emails, text messages, internal memoranda, spreadsheets, payroll reports, bank statements, loan applications, forgiveness requests, and any communications with lenders or the SBA. Automated deletion policies must be suspended for all custodians with potentially relevant data during an internal investigation.

Attorney-client privilege plays a critical role in structuring internal investigations. When outside counsel directs an internal review, communications between the company and its attorneys, as well as work product prepared in anticipation of litigation or for the purpose of legal advice, can be protected from government disclosure.

However, privilege is not automatic. It must be established and maintained through careful procedures: clearly defining the scope of the engagement as a legal matter, ensuring that forensic accountants and consultants work at counsel’s direction, and controlling distribution of privileged materials within the company.

Companies that attempt to conduct internal reviews without counsel, or that share privileged findings with third parties outside the attorney-client relationship, risk waiving privilege entirely. A subsequent civil investigative demand or subpoena can compel production of documents that were not properly protected.

Steps to Take When Your Company Faces a PPP Investigation

If your company has received notice of a federal investigation, or if you have reason to believe one is underway, take the following steps in order:

1. Retain federal criminal defense counsel immediately. Do this before responding to any investigator, agent, or subpoena. Counsel should be experienced in federal investigations and Colorado PPP loan fraud defense or the relevant jurisdiction.
2. Issue a company-wide litigation hold. Preserve all PPP-related records, including applications, payroll data, bank statements, internal communications, and correspondence with lenders or the SBA.
3. Do not speak with federal agents without counsel present. Any statement made to an FBI agent, SBA OIG investigator, or IRS CI agent can be used against your company and its officers. False statements to federal agents are independently criminal under 18 U.S.C. § 1001.
4. Coordinate an internal audit under counsel’s direction. Engage forensic accountants to analyze PPP-related financial records, identify discrepancies, and assess whether errors reflect good-faith reliance on evolving PPP guidance or intentional misrepresentation.
5. Develop a controlled communication plan. Designate one point of contact for all government communications. Instruct employees not to discuss the investigation with outside parties, on social media, or with anyone other than company counsel.
6. Evaluate voluntary disclosure and cooperation strategies with counsel. In some cases, demonstrating proactive compliance efforts and self-correction may influence how prosecutors evaluate intent and charging decisions.

How Evergreen Attorneys Can Help

Evergreen Attorneys won 9-0 in the U.S. Supreme Court in United States v. Hemani in June 2026, demonstrating the firm’s capacity to handle complex federal litigation at the highest level.

Evergreen Attorneys serves as outside federal criminal defense counsel for businesses and individuals facing PPP loan fraud corporate investigations. The firm’s attorneys handle pre-charge federal investigations, coordinating internal corporate reviews, managing communications with the DOJ, SBA OIG, IRS Criminal Investigation, and the FBI, and engaging forensic accountants to analyze PPP-related financial records.

Founding Partner Zachary Newland has appeared as counsel of record in more than 120 federal cases since 2016. His practice focuses on white collar crime, federal investigations, and federal trial work. Evergreen Attorneys provides partner-level representation at every stage of a PPP investigation, from initial document preservation and privilege management through grand jury proceedings and, if necessary, trial.

The firm’s approach centers on early intervention: identifying exposure, structuring privileged internal reviews, and developing a defense strategy that addresses both immediate investigative risks and longer-term criminal exposure.

Frequently Asked Questions

What is the difference between an internal corporate investigation and a federal investigation into PPP loan fraud?

An internal corporate investigation is initiated by the company itself, typically under the direction of outside counsel, to assess PPP compliance and identify potential problems before or during a government inquiry. A federal investigation is conducted by agencies such as the DOJ, SBA OIG, or IRS Criminal Investigation, using subpoenas, interviews, and forensic analysis to determine whether criminal charges are warranted. The two often run concurrently. A well-structured internal investigation can support a defense strategy, but only if it is coordinated with experienced counsel to preserve privilege and avoid creating new exposure.

Can a company correct PPP loan errors without facing criminal charges?

Corrections made before a federal investigation begins may reduce exposure, but timing and context matter. The SBA created a safe harbor for borrowers who returned PPP funds within a specified period, and the government has considered good-faith reliance on ambiguous PPP guidance as a relevant factor. However, once a federal investigation is open, any correction or voluntary disclosure should be made only under the guidance of defense counsel. Uncoordinated self-reporting can inadvertently create admissions that could lead to federal criminal convictions.

How does attorney-client privilege apply to internal PPP fraud audits?

Attorney-client privilege can protect communications between a company and its counsel, as well as work product generated during an internal investigation directed by counsel. When forensic accountants or auditors work at counsel’s direction for the purpose of providing legal advice, their findings may be protected. However, privilege can be waived if audit results are shared outside the privileged relationship, if the investigation is not properly structured, or if documents are created for a business purpose rather than a legal one. Counsel must manage these boundaries from the outset.

The law of attorney-client privilege and work-product privilege is complicated and requires expert defense counsel to navigate it appropriately.

When should a business involve federal defense counsel in a PPP loan fraud investigation?

A business should retain federal defense counsel as soon as it has any reason to believe a PPP-related investigation may be underway. Warning signs include contact from federal agents, receipt of a grand jury subpoena or civil investigative demand, notification that the company is a target or subject of a federal investigation, or a lender’s request for additional PPP documentation that appears unusual. Early involvement of counsel is critical because statements made, documents produced, and internal actions taken before counsel is retained can significantly limit later defense options.

If your business is facing a federal corporate investigation into PPP loan fraud, contact Evergreen Attorneys at (303) 948-1489 for an immediate confidential case evaluation today.