COVID-era financial relief programs successfully helped small businesses survive the unprecedented strain of the COVID pandemic and also provided an opportunity for a lot of bad actors to help themselves to government relief funds.
The four primary business relief programs to assist businesses during the pandemic downturn included the Paycheck Protection Program (PPP), Economic Injury Disaster Loans (EIDL), the Restaurant Revitalization Fund (RRF), and the Shuttered Venue Operators Grant (SVOG).
A report from the Small Business Administration (SBA) details the benefits provided by these four programs to businesses, including the preservation and creation of millions of jobs, support for business start-ups, and a reduction in closure rates of struggling small businesses.
But amid those relief funds were large sums of money paid out to fraudsters. In April of 2026, the SBA transmitted records to the U.S. Treasury for collection on 562,000 pandemic-relief fund loans totaling approximately $22 billion that are suspected to be fraudulent. In 2025, the U.S. Government Accountability Office reported that we may never know how much money was lost to scammers, but estimates are in the “hundreds of billions of dollars.”
PPP fraud, tax crime and IRS Criminal Investigations
If you are one of the individuals who submitted a fraudulent loan application to a pandemic-era relief fund, it is important to understand the nature of tax fraud. Fraud involving PPP loans, EIDL loans, or supporting tax documentation can trigger serious consequences, including criminal investigations and prosecution.
If you would like additional background on how tax fraud is defined and prosecuted, our resource guide, Understanding Tax Fraud, explains the key concepts and potential consequences, including circumstances that may result in an Internal Revenue Service (IRS) criminal investigation.
In that regard, consider a North Carolina man, Phillip Collins. According to the IRS, Collins prepared and filed false loan applications to the PPP and EIDL programs and received $170,833 in loan proceeds. To do so, he filed false tax documents and fraudulent financial statements, and he made false representations regarding his business and the number of employees.
When the IRS pursued the case, Collins pleaded guilty as charged and awaits sentencing later in 2026. He faces a maximum sentence of 30 years in prison and a $1 million fine. He will also be required to pay the $170,833 obtained through fraudulent loans.
Individuals who obtained pandemic-relief funds through false statements, altered tax records, fabricated payroll information, or other fraudulent means may face substantial financial penalties and potential criminal exposure.
When to contact an IRS criminal attorney
Whether you knew, or should have known, that you were not eligible for pandemic-relief funds, now is not the time to hope for the best. If you have concerns about PPP fraud allegations, tax fraud, or a potential IRS investigation, it is important to get straight advice and representation to set a course for a better outcome than Collins. Contact Robert J. Fedor, L.L.C., at 440-250-9709. Our law firm advises clients on matters involving tax fraud, tax crime, and related enforcement actions. With offices in Cleveland and Chicago, we help clients domestically and abroad.
