A former Houston bank employee has been sentenced to 50 months in federal prison for orchestrating a scheme that pushed fraudulent Paycheck Protection Program loans through to businesses that didn't qualify — including some that never existed at all. Feliciano Pineda, 38, was also ordered to pay approximately $2.2 million in restitution and will serve three years of supervised release once he gets out.
U.S. District Judge George C. Hanks Jr. handed down the sentence after Pineda pleaded guilty on February 12 to conspiring to defraud his former employer through fraudulent PPP loans, according to Fox 26 Houston. Pineda worked at a Houston bank in 2020, and prosecutors said that between April and August of that year, he processed fraudulent PPP loans for businesses that did not qualify — some of which had falsely inflated financial information, and others that simply didn't exist.
To collect his cut, Pineda created a fake limited liability company and opened a business bank account specifically to receive kickback checks, the outlet reported. According to prosecutors, he received more than $200,000 in loan proceeds from borrowers whose PPP applications he helped push through, and the court heard that he helped customers obtain millions of dollars in fraudulent loans overall. The court also heard that Pineda obstructed the investigation into his conduct. He had remained free on bond and will now surrender to a federal Bureau of Prisons facility to be determined at a later date.
Why Federal Prosecutors Are Still Chasing 2020 Loans
The case might seem like ancient history given that the fraud dates back to the earliest, most chaotic months of the pandemic. But Congress gave federal prosecutors a lot more runway to bring these cases. Under the PPP and Bank Fraud Enforcement Harmonization Act of 2022, signed into law that August, the criminal and civil statute of limitations for PPP fraud was extended from five years to ten, according to the U.S. Department of Justice. That change is why federal prosecutors are still actively charging and sentencing loan fraud from 2020 well into 2026.
Federal prosecutors handled the case, per the Justice Department. Assistant U.S. Attorney Stephanie Bauman prosecuted the case, and the U.S. Attorney's Office for the Southern District of Texas provided the underlying information on Pineda's sentencing to Fox 26 Houston. Bauman has a track record with these cases — she previously prosecuted a July 2025 matter in the same district where Missouri City resident Shawn Nicholas Young pleaded guilty after submitting more than 100 applications requesting more than $9.5 million in pandemic loans and profiting $1.65 million, according to the U.S. Small Business Administration.
A National Crackdown Reaches Houston Repeatedly
Pineda's sentence lands amid a broader restructuring of how the federal government hunts down pandemic-era fraud. In April 2026, the Justice Department formally established the National Fraud Enforcement Division to centralize and intensify prosecutions of fraud targeting taxpayer-funded benefit programs nationwide. Then in August 2026, the department stood up the National Fraud Detection Center under that same division, using cross-agency data analytics to identify complex fraud schemes across federal programs, according to the Federal Bureau of Investigation.
The scale of what these agencies are chasing is enormous. A Small Business Administration Office of Inspector General estimate put pandemic relief fraud at at least $200 billion. As recently as April 24, 2026, the SBA referred 562,000 suspected fraudulent pandemic loans totaling $22.2 billion to the U.S. Department of the Treasury for active collection.
Houston has become something of a recurring backdrop for these enforcement actions. Just this year, four Houston-area home building companies and three owners agreed to pay $2.65 million to settle allegations they inflated payroll figures to fraudulently obtain PPP funds, as Hoodline previously reported. And in July, Houston-based Matrix Metals LLC agreed to pay over $1.17 million to resolve civil False Claims Act allegations tied to an improperly obtained Second Draw PPP loan.
Unanswered Questions Remain
Pineda was sentenced to 50 months in prison after pleading guilty to conspiring to defraud his former employer through fraudulent PPP loans. Not addressed in the case as reported is the identity of the Houston bank that employed Pineda, or whether any of the borrowers who allegedly paid him kickbacks — or other potential co-conspirators — face separate criminal charges or civil recovery actions of their own.
