Florida companies settle False Claims Act allegations related to PPP loans | PC Weiner Brodsky Kider

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Two Florida companies have agreed to settle allegations with the Justice Department that they knowingly provided false information on a Paycheck Protection Program (PPP) loan forgiveness application. The companies agreed to pay more than $271,000 in damages and penalties under the False Claims Act and more than $53,000 in civil penalties under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA).

Congress created PPP at the start of the COVID-19 pandemic to provide emergency financial support to small businesses struggling to pay employees and other business expenses. Businesses could apply for loan forgiveness if they certified that the funds had been spent on qualifying expenses, such as payroll.

The DOJ alleged that one of the companies falsely certified that its PPP loan had been used to pay its employees. The company claimed to have paid salaries to its employees, when in fact some of those employees were actually employees of a separate Florida company.

The settlement resolves a qui tam action brought under the whistleblower provision of the False Claims Act. The whistleblower will receive approximately $46,000 as part of the settlement. The DOJ’s COVID-19 Fraud Enforcement Task Force coordinated the government’s efforts to secure the result.

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