Can You Challenge Charges for PPP Loan Fraud in Texas?

 Posted on July 17, 2025 in Fraud

The Paycheck Protection Program (PPP) was created to help businesses keep workers employed during the COVID-19 pandemic. As billions of dollars were distributed, federal and state authorities started investigating people suspected of PPP loan fraud. If you are facing accusations, a Dallas, TX PPP loan fraud defense lawyer can help you understand your rights and legal options.

What Does It Mean To Be Charged With PPP Loan Fraud?

PPP loan fraud happens when someone lies or uses false information to get money from the program. This might involve lying about the number of employees, making up fake businesses, using the money for personal expenses instead of business needs, or submitting fake documents to support the loan application or forgiveness.

If you have been accused of PPP loan fraud, you may face both federal and state charges. For example, U.S. statute § 1343 makes it a crime to use wires or electronic communication to commit fraud. This includes online loan applications, emails, or bank transfers connected to PPP funds.

In Texas, state-level fraud charges might also apply. For example, Texas Penal Code § 32.45 makes it illegal for someone who manages money for others to use it improperly. Using PPP funds for personal shopping sprees or luxury items could fall under this law, and you could even face federal charges.

What Are the Penalties if Convicted of PPP Loan Fraud?

PPP loan fraud is treated seriously because it involves government funds. Penalties for a conviction can vary based on the details of your case, but if convicted, you may face:

• Up to 20 years in prison

• Large fines in the sums of hundreds of thousands of dollars, depending on the amount taken

• Court-ordered repayment of stolen funds

• The seizing of any property or money connected to the fraud

Cases across the country show how serious these penalties can be. In June 2025, a former TV anchor and executive was convicted in the Northern District of Texas for her role in a scheme involving over $300,000 in fraudulent PPP loans through her company. Earlier, in March 2025, a restaurant owner in Hamden, CT was sentenced for scamming COVID relief programs out of $750,000, some of which he used for overseas real estate purchases. Some cases involve smaller amounts. Regardless, the penalties can be substantial.

How Do You Defend Against PPP Loan Fraud Charges?

A criminal charge does not equal a conviction. A strong defense can help protect your freedom and finances. Possible defenses include:

• Lack of intent: Prosecutors must prove you knowingly tried to deceive the government. Honest mistakes in paperwork or confusion about changing rules might not be criminal.

• Insufficient evidence: The government needs solid proof. If there are errors or missing documents, your lawyer may challenge the case.

• Legitimate business expenses: If you can show that funds were used for approved business costs like payroll or rent, it could help defend against the charges.

As of April 2025, the government continues to crack down on pandemic-related fraud. Congress proposed a bill to extend the statute of limitations for PPP fraud cases from five to 10 years, aiming to give prosecutors more time to investigate and charge suspects.

Schedule Your Free Consultation With a Dallas, TX PPP Loan Fraud Defense Attorney Today

The Dallas, TX white collar crimes defense lawyers at Spencer & Associates have successfully handled some very high-profile fraud defense cases. We bring significant experience in recovering seized assets. We strive to avoid litigation when possible through strong negotiation. However, we are fully prepared to fight in court when necessary. Call 214-385-8500 today to schedule a free consultation.