Florida Company Settles DOJ and SBA Charges for PPP Fraud

Jason S. Kanterman Commentary by Jason S. Kanterman

A Florida-based company settled Department of Justice ("DOJ") and Small Business Administration ("SBA") charges for conspiring to fraudulently obtain loan funds provided under the Paycheck Protection Program ("PPP").

The agreement stems from a qui tam action initiated under the False Claims Act ("FCA") related to the PPP.

The DOJ and SBA alleged that a company that provides management services to car dealerships was ineligible for loans under the PPP due to its size once affiliated businesses were included. The company obtained a PPP loan of $6,282,362 in April 2020. The DOJ and SBA contended that the company should have been aware of its ineligibility by May 2021, yet applied for and received full forgiveness of the loan in June 2021.

To settle these claims, the company agreed to (i) pay $9,000,000, of which $6,971,256.95 represents restitution and (ii) execute a Consent Judgement as stipulated in the Settlement Agreement. The DOJ stated it would pay the relator a share of the penalty.


More than three years after the PPP program started, we continue to see the government prosecute fraud stemming from it. I expect the False Claims Act to be used regularly throughout the next several years to root out and prosecute PPP-related fraud, and this case is but an example of those continued efforts. (See related analysis.)

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