What to Know About Facing an ERC or PPP Fraud Investigation in 2025

As we head into 2025, the Internal Revenue Service (IRS) is continuing to aggressively target taxpayers suspected of Paycheck Protection Program (PPP) and Employee Retention Credit (ERC) fraud. The IRS’ Criminal Investigation Division (IRS CI) is working with federal prosecutors to pursue a wide range of charges in these cases—including charges like wire fraud and money laundering that carry six-figure fines and decades of federal prison time. Learn more from New Jersey criminal tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group.

ERC and PPP Fraud Investigations Present Substantial Risks

Regardless of the allegations involved, all ERC and PPP fraud investigations present substantial risks. The IRS is continuing to prioritize enforcement under these pandemic-era programs, and it is working to claw back as much money as possible from those accused of defrauding the federal government.

Beyond restitution liability, however, individuals and businesses targeted in these investigations can also face substantial criminal fines, and individuals convicted of ERC or PPP fraud can face incarceration as well. In recent cases, federal prosecutors have filed charges including (but not limited to):

• Wire Fraud – Submitting a fraudulent PPP loan application, PPP loan forgiveness certification, or ERC claim online can implicate the federal wire fraud statute.
• Money Laundering – Using ERC or PPP funds for unlawful purposes or attempting to conceal the source of illegally obtained funds can lead to charges for money laundering.
• Tax Evasion and Tax Fraud – Improperly claiming the ERC, improperly claiming PPP-related deductions, and failing to accurately report related taxable income can lead to charges for federal tax evasion and tax fraud.
• False Statements – Making false statements in a federal filing or to federal agents is a federal criminal offense. Attempting to conceal information from federal agents can lead to criminal charges as well.
• Conspiracy – In many cases, prosecutors are using the federal conspiracy statute to pursue ERC and PPP-related charges against tax preparers, business associates and other individuals who were only tangentially involved in attempted ERC and PPP fraud schemes.

These charges all carry substantial fines and prison terms—and they are far from the only charges that prosecutors can pursue against individuals and organizations suspected of defrauding the federal government. When prosecutors pursue multiple counts of multiple charges, targets can easily face millions of dollars in potential fines and an effective life sentence.

Defending Against Allegations of ERC or PPP Fraud

Given the risks involved with facing an ERC or PPP fraud investigation, individuals and organizations targeted in these investigations need to defend themselves by all means available. This starts with engaging experienced defense counsel. While facing serious criminal charges is a very real possibility, with the right approach, investigation targets can significantly mitigate their risk of facing life-altering or business-threatening consequences.

Schedule an Appointment with New Jersey Criminal Tax Lawyer Kevin E. Thorn

Are you (or is your business) facing an ERC or PPP fraud investigation? If so, we can help, but you need to contact us promptly. To schedule an appointment with New Jersey criminal tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group, call 201-842-7696 or contact us confidentially online now.