by Ben Vernia | February 2nd, 2023
On February 1, the Department of Justice announced that three Northern California companies had agreed to settle allegations that they submitted false claims to the government in connection with the COVID-19 Paycheck Protection Program (PPP). According to DOJ’s press release:
Three California companies have agreed to pay a total of $530,000 to settle allegations that they knowingly violated the False Claims Act when they received and retained more than one Paycheck Protection Program (PPP) loan prior to Dec. 31, 2020, in violation of PPP rules.
La Baguette, LLC, which operates a bakery in Palo Alto, has agreed to pay $430,000 to settle allegations that it received and retained a duplicate PPP loan in 2020 and then later improperly sought and received forgiveness for the duplicate loan.
Dynamic Integrated Solutions, Inc., an industrial equipment supplier located in Santa Clara, has agreed to pay $50,000 in civil penalties to settle allegations that it received and retained a duplicate loan. The company agreed to repay the 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 $985,000 on the duplicate loan.
Priority Acquisitions, Inc., a licensed general contractor located in Castro Valley, has agreed to pay $50,000 in civil damages and penalties to settle allegations that it received and retained a duplicate loan. The company agreed to repay the loan in full to its lender, relieving the SBA of liability for the federal guaranty of approximately $200,625.
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.
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The case was brought in a single case by a whistleblower, who will receive $80,000 of the settlement (a 15% relator’s share of the $530,000 total).
