Even though the COVID-19 pandemic is in the rearview mirror, federal authorities are continuing to investigate pandemic-era fraud in 2026. With taxpayer losses from the Paycheck Protection Program (PPP) and Employee Retention Credit (ERC) programs estimated at hundreds of billions of dollars, exposing fraud in these programs remains a top federal law enforcement priority. What do you need to know if you are facing a PPP or ERC fraud investigation? Find out from New York criminal tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group.
Defending Against a PPP or ERC Fraud Investigation Requires an Informed Approach
PPP fraud and ERC fraud investigations present substantial risks. Allegations of intentional fraud under these programs can expose businesses, business owners and executives, and other individuals to federal criminal prosecution. The U.S. Department of Justice (DOJ) is pursuing charges in these cases for a wide variety of offenses, including those that carry substantial fines and prison time.
With this in mind, defending against PPP fraud and ERC fraud investigations requires an informed approach. Taking an informed approach involves:
- Ensuring that you have a clear and comprehensive understanding of the allegations at issue;
- Ensuring that you understand the penalties that are on the table;
- Locating and preserving all relevant documents;
- Reviewing all relevant documents for the purpose of assessing potential civil or criminal liability exposure; and,
- Developing a defense strategy that is custom-tailored to the circumstances at hand.
In addition to taking these steps, targeted taxpayers must ensure they are prepared to respond effectively to search warrants, subpoenas, and other means of inquiry. While targeted taxpayers must comply with their legal obligations, they must also know when they can—and should—challenge government overreach in order to protect their interests during the investigative process.
Targeted Taxpayers Need to Be Very Careful to Avoid Costly Mistakes
When responding to a PPP or ERC fraud investigation, targeted taxpayers also need to be careful to avoid mistakes that could jeopardize their defense. For example, inadvertently waiving the attorney-client privilege or otherwise disclosing information that taxpayers are entitled to withhold can have serious consequences. Unnecessarily providing information to federal authorities is a mistake that generally cannot be undone, and if prosecutors have the evidence they need to seek an indictment, they will not hesitate to do so.
While PPP and ERC fraud investigations pose substantial risks, targeted taxpayers can mitigate them by executing an informed, proactive, and strategic defense. If you need to know more about defending against a PPP or ERC fraud investigation in 2026, we strongly recommend engaging experienced defense counsel right away.
Schedule a Call with New York Criminal Tax Lawyer Kevin E. Thorn
New York criminal tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group, provides experienced legal representation for individuals and businesses targeted in PPP and ERC fraud investigations. To speak with Mr. Thorn in confidence as soon as possible, call 914-534-6004 or contact us confidentially online today.
