by Ben Vernia | February 14th, 2022
On February 11, the Department of Justice announced that Zen Solutions, LLC, based in Northern Virginia, has agreed to pay $31,000 to settle allegations that the company submitted false claims under the Paycheck Protection Program (PPP), set up to address the COVID-19 pandemic. According to DOJ’s press release:
Zen Solutions Inc., a Virginia-based company, has agreed to pay approximately $31,000 in damages and civil penalties to settle allegations that it violated the False Claims Act by obtaining more than one Paycheck Protection Program (PPP) loan in 2020. Zen Solutions also agreed to repay the duplicative PPP loan in full to its lender, relieving the U.S. Small Business Administration (SBA) of liability to the lender for the federal guaranty of approximately $192,000 on the improper loan.
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Congress created the PPP in March 2020, as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, to provide emergency financial support to the millions of Americans suffering the economic effects caused by the COVID-19 pandemic. The CARES Act authorized billions of dollars in forgivable loans to small businesses struggling to pay employees and other business expenses. Throughout 2020, PPP loan applicants were required to certify that they would not receive more than one PPP loan prior to Dec. 31, 2020. This settlement resolves allegations that Zen Solutions applied for and received a second, duplicative PPP loan in 2020.
Zen Solutions provides staffing services in the fields of information technology, data analytics, cyber security and litigation support. The settlement with Zen Solutions resolved a lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery. The civil lawsuit was filed by J. Bryan Quesenberry. As part of this resolution, he will receive a share of the recovery.
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The case apparently arose from a government investigation, rather than a whistleblower’s qui tam lawsuit.
