It was in early April when the federal government unveiled the Paycheck Protection Program (PPP) to help small businesses keep their employees during the COVID-19 pandemic. The program is also meant to help ensure that businesses are able to keep their doors open by providing funds that help with the cost of rent and other expenses. Now, it has been learned that it is not only small businesses that are applying for a loan through the program, but larger businesses are making fraudulent claims. The banks have been accused of giving preference to these larger companies because they can pay more in bank fees.
What is the PPP?The PPP allows small businesses to take out forgivable loans up to $349 billion collectively so they can get through the COVID-19 pandemic and keep their employees on the payroll. The loans are also meant to help small business owners keep their utilities on and pay their rent during this extremely challenging time. Businesses that used the loans appropriately and directed the funds to payroll and maintenance costs were not required to repay the loans.
Under the program’s requirements, businesses are only permitted to take out one loan, and the businesses that received help could receive a loan on a first-come-first-serve basis.
PPP and Whistleblower ClaimsThe PPP was only intended to help small businesses, as major corporations and franchises likely did not require the same type of help during this uncertain time. Still, large companies such as Shake Shack have applied for PPP loans, taking funds away from the small businesses the program meant to protect. When applying for the PPP, many large businesses have submitted fraudulent business records or falsely claimed that they required funds to keep employees during the pandemic. These actions are a direct violation of the federal False Claims Act, and the California False Claims Act.
Under both Acts, employees who learn of an employer submitting fraudulent claims to benefit from the PPP can file a whistleblower lawsuit. Whistleblower lawsuits provide compensation to individuals who blow the whistle on people or companies trying to defraud the state or federal government. In successful cases, whistleblowers can receive up to 30% of all funds recovered by the government.
Examples of PPP fraud include applying for multiple loans, falsifying the urgent need for PPP funds, laying employees off after receiving funds from the PPP, or using the funds inappropriately in a way not allowed by the program’s requirements. If you believe your employer has deceived the government to receive PPP funds, it is important to speak to a California qui tam lawyer.
Our California Qui Tam Lawyer can HelpIf your employer has made fraudulent claims to receive PPP funds, used the funds inappropriately, or otherwise defrauded the government, our San Francisco qui tam lawyer can help. At the Brod Law Firm, we know how to successfully pursue whistleblower claims and will help you make things right. Call us today at (800) 427-7020 or contact us online to schedule a free consultation and to learn more about how we can help.
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