Settlement Reached in PPP Loan Fraud Case

Three companies based in California will pay a total of $530,000 to settle allegations that they violated Paycheck Protection Program (PPP) rules.

Settlement Reached in PPP Loan Fraud Case

The allegations claim each company violated the False Claims Act when they received and retained more than one PPP loan prior to December 31, 2020. PPP loans were first created in March 2020 as part of the CARES Act, with applicants required to certify that they would not receive more than one PPP loan before the end of that year.

Settlements for Duplicate PPP Loans

A bakery in Palo Alto is paying the largest share of the total settlement amount at $430,000. The allegations against La Baguette include the company receiving and retaining a duplicate PPP loan in 2020.

Two other businesses will pay $50,000 each for the settlement, including Dynamic Integrated Solutions, which is an industrial equipment supplier located in Santa Clara. A licensed general contractor located in Castro Valley, Priority Acquisitions, has also agreed to pay the sum in civil damages and penalties to settle the allegations.

‘Violators Will Be Identified’

Principal Deputy Assistant Attorney General Brian M. Boynton is the head of the Civil Division at the Department of Justice, and he said: “PPP loans were intended to provide critical relief to small businesses. The department is committed to pursuing those who knowingly violated the requirements of the PPP or other Covid-19 assistance programs and obtained relief funds to which they were not entitled.”

U.S. Attorney Stephanie M. Hinds for the Northern District of California added: “PPP loans were intended to help qualified businesses retain their employees and pay other bills during the pandemic. This Office will continue to pursue any business that misused the program by obtaining PPP loans for which they were not eligible, as the three settlements announced today reflect.”

Special Agent in Charge Weston King, of the Small Business Administration OIG’s Western Region, also waded in to warn those who violate the False Claim Act by fraudulently receiving and retaining SBA pandemic program funds, saying they ‘will be held accountable’.

Special Agent King concluded: “This settlement demonstrates that wrongfully obtaining taxpayer dollars will not go unnoticed, and violators will be identified. I want to thank the U.S. Attorney’s Office and our law enforcement partners for their support and dedication to pursuing justice in this case.”

How to Report Suspected Covid-19 Fraud

The Justice Department’s Civil Division has a special Fraud Section on its website where anyone can provide them with tips about potential fraud affecting Covid-19 government relief programs.

Anyone with information about allegations of attempted Covid-19-related fraud can also report it through the National Center for Disaster Fraud Hotline at 866-720-5721.

Image: Depositphotos

This article, "Settlement Reached in PPP Loan Fraud Case" was first published on Small Business Trends