Do You Need to Be Worried About Your Company’s PPP Loan in 2025?

The Paycheck Protection Program (PPP) was a pandemic-era program intended to help companies keep their employees on payroll as the economy faltered. The program was open for portions of 2020 and 2021, and it allowed eligible companies to apply for forgivable government-backed loans from participating financial institutions. Why, then, are we still talking about the PPP in late 2025? Texas criminal tax lawyer Lawrence Brown explains:

FBI Estimates $64 Billion in Taxpayer Losses Due to PPP Fraud

Last year, the Federal Bureau of Investigation (FBI) published a brief article discussing its ongoing efforts to fight pandemic-era fraud. In the article, the FBI estimates that PPP fraud has cost taxpayers $64 billion. The FBI describes pandemic-era fraud as “theft [that] was massive in scale,” and it notes that the reasons for its efforts to uncover pandemic-era fraud are twofold: (i) to hold criminals accountable; and (ii) to deter similar fraud in the future.

IRS Announces 2,039 Tax and Money Laundering Cases Related to Pandemic-Era Fraud

Along with the FBI, the Internal Revenue Service (IRS) is also continuing to target pandemic-era fraud, including specifically PPP fraud. Earlier this year, the IRS issued a press release in which it noted that IRS Criminal Investigation (IRS CI), “has launched 2,039 tax and money laundering cases related to COVID fraud, with attempted fraud in these cases totaling $10 billion.” The IRS’s press release also states that these cases involve “a broad range of criminal activity, including fraudulently obtained loans, credits and payments”—meaning that the $10 billion in alleged fraud at issue is not strictly fraud under the PPP.

Thus, with an estimated $64 billion in fraud under the PPP, IRS CI’s efforts to date have targeted only a small portion of the suspected fraud.

FBI, IRS CI, and Other Federal Authorities Are Continuing to Target PPP Fraud in 2025

With this being the case, the FBI, IRS CI, and other federal authorities are continuing to target PPP fraud in 2025. Last month alone, IRS CI announced charges in five separate cases involving alleged pandemic-era fraud, four of which involved allegations of PPP fraud. This is consistent with what we have seen throughout the year, and it makes clear that uncovering and prosecuting PPP fraud remains a top federal law enforcement priority.

Do You Need to Be Worried About Your Company’s PPP Loan?

With this in mind, do you need to be worried about your company’s PPP loan? In light of the federal government’s continuing focus on prosecuting PPP fraud, this is a legitimate concern in 2025 (and likely beyond). For companies that applied for PPP loans, it will be worthwhile to reevaluate their applications, the use of PPP loan funds, and their forgiveness certifications to determine whether they may be at risk of a federal investigation and prosecution. Some examples of potential risks include:

• Submitting PPP Loans for Ineligible Business Entities – Businesses were required to meet strict eligibility criteria in order to apply for PPP loans. Federal authorities have targeted businesses and individuals for submitting both successful and unsuccessful PPP loan applications on behalf of ineligible entities.
• Using Fraudulent Documentation to Support PPP Loan Applications – Federal authorities have also targeted businesses and individuals for using fraudulent documentation to obtain PPP loans. This includes inaccurate payroll records and falsified tax records, among others.
• “Stacking” PPP Loan Applications – While eligible businesses were permitted to apply for PPP loans during both phases of the program, simultaneously obtaining multiple PPP loans (a practice referred to as “stacking”) was prohibited under the terms of the program.
• Using PPP Funds for Unauthorized Purposes – Under the terms of the PPP, businesses that received loans were only permitted to use their loans for qualifying business purposes. Using PPP funds for unauthorized purposes was prohibited and constitutes grounds for prosecution under federal law.
• Fraudulently Certifying Eligibility for PPP Loan Forgiveness – To obtain forgiveness of their PPP loans, businesses were required to certify compliance with the terms of the program. Businesses that submitted fraudulent certifications and individuals who signed them may both face prosecution.

All of these issues can—and have—led to federal investigations resulting in serious federal criminal charges. This includes not only tax-related criminal charges (e.g., tax evasion and tax fraud involving improper PPP-related business deductions), but also charges for bank fraud, government fraud, wire fraud, and other serious crimes.

What Should You Do if the FBI or IRS CI is Looking Into Your Company’s PPP Loan?

For companies that proactively identify issues with their PPP loans, there are options to resolve them without triggering an audit or investigation. But what if the FBI or IRS CI is already looking into your company’s PPP loan (or loans)?

In this scenario, a comprehensive and cohesive defense strategy will be critical for avoiding unnecessary consequences. Federal agents and prosecutors are aggressively targeting all forms of PPP fraud, and charges for tax evasion, tax fraud, and other federal crimes carry substantial penalties. For companies that are under investigation, avoiding an indictment should be their top priority—and whether this involves seeking to avoid liability altogether or negotiating a settlement with the IRS (or the U.S. Department of Justice (DOJ)) will depend on the circumstances at hand. In any case, ensuring that the company’s leadership team and legal counsel have an accurate understanding of the relevant circumstances is a key first step toward targeting a favorable resolution.

Request a Confidential Consultation with Texas Criminal Tax Lawyer Lawrence Brown

If you have concerns about a PPP loan—or if your company is facing FBI or IRS CI scrutiny related to a PPP loan—we invite you to get in touch. We represent companies of all sizes in high-stakes federal law enforcement matters throughout Texas. To request a confidential consultation with Texas criminal tax lawyer Lawrence Brown, please call 888-870-0025 or tell us how we can contact you online today.