Congress established the Restaurant Revitalization Fund (RRF) in March 2021 to help qualified restaurants suffering financial losses during the COVID-19 pandemic. The RRF program was overseen by the Small Business Administration (SBA), which began accepting applications and awarding funds in May 2021. The SBA stopped accepting RRF applications in July 2021, by which time nearly $30 billion had been awarded and distributed to approximately 100,000 business, some of whom got as much as $10 million. We now know that many RRF applications were fraudulent and a lot of the awarded RRF proceeds were misused. The government needs the public’s help to expose this massive RRF fraud and recover money for the American taxpayers. An experienced whistleblower attorney can assist you in coming forward with this vital information.

Do you want to report RRF fraud to the SBA and potentially receive a whistleblower reward of up to 30%?

If so, here are questions a whistleblower attorney will want to ask about the RRF awardees eligibility, calculation of award amounts and use of proceeds: Was the awardee even eligible to receive RRF funds in the first place? It may have been ineligible if it was not really in the business of serving food or drink to the public. Or because it was not operating or incurring expenses before 3/11/2021. Or because it was just a sham business with a phony name, address, EIN, cert. of incorporation and tax/accounting documents.

Was the business ineligible for any other reasons?

It may have been because it was a publicly traded company, non-profit organization, private club or non-SBA listed franchisee. Or because it was permanently closed, bankrupt or had received a Shuttered Venues Operators Grant. Or because it was affiliated with other businesses which collectively had more than 20 different addresses.

Understanding the number of restaurants owned or operated by the same person or business is one key point the government is investigating RRF cases. For example, on November 1, 2023, the U.S. Attorney for the Northern District of New York announced a $2 million settlement against a Denny’s Restaurant franchise owner in that case, the owner certified it did not own or operate more than 20 affiliated restaurants, when in fact, it owned 21 Denny’s in various NY and AZ locations, according to the government.

What other eligibility criteria did the SBA consider in awarding RRF money?

A business or its owner was ineligible if either had been suspended, barred or excluded from any government programs. Or if the business had engaged in any form of illegal activity. Or if the business did not really need the money during the COVID-19 pandemic.

Do you know if the RRF awardee made fraudulent representations to get priority treatment over other restaurants?

These include falsely claiming the business was 51% or more owned and controlled by a woman, veteran or socially/economic person (because of race or income).

Did the RRF awardee receive too much RRF money?

The business may have been overpaid if it exaggerated its loss of revenue as a result of the COVID-19 pandemic. Or if it received more than $5 million even though it had only one physical location. Or if the business, together with all of its affiliated businesses, received more than $10 million.

Did the awardee misuse any RRF funds?

Improper expenditures would include personal, lifestyle and/or non-business expenses, such as homes, cars, travel, vacation and investments. It would also include transferring RRF proceeds to another business or using them to pre-pay principal or interest on a loan.

Did the awardee improperly retain unspent RRF funds?

Businesses were required to fully spend all of the money on permitted uses before either closing permanently or before 3/11/2023, whichever occurred first. Any unspent money had to be returned to the SBA.

Finally, did the awardee fail to file timely and accurate reports with the SBA?

Recipients were required to file annual reports on their use of RRF funds. And those reports had to accurately disclose how RRF proceeds were spent. If you think you have an SBA RRF fraud case for any of the reasons listed above, please contact us immediately to evaluate the matter further. You may be entitled to 15%-30% of any recovered funds by filing a False Claims Act qui tam whistleblower lawsuit. But you need a whistleblower attorney to file the lawsuit for you. And, you need to do so before anyone else files a competing case or before your allegations become public.