Whistleblower PPP Loan

How to receive a Whistleblower Reward for PPP Loan Fraud
Are you interested in receiving a Whistleblower Reward for PPP Loan Fraud? If so, and if you have the required information you might receive between 15% and 30% of any proceeds recovered as a result of your assistance. Read more:
PPP background information

The Paycheck Protection Program (“PPP”) is administered by the United States Small Business Administration (“SBA”), which is an executive branch agency of the government providing support to entrepreneurs and small businesses. The SBA’s mission is to maintain and strengthen the nation’s economy by enabling the establishment and viability of small businesses and by assisting in the economic recovery of communities after disasters. Allegations of misuse or abuse of SBA programs and funds are investigated by the agency’s Office of Inspector General (“OIG”). In March 2020, the government enacted the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act to provide emergency financial assistance to those suffering the economic effects of the COVID-19 pandemic.

In April 2020, pursuant to the CARES Act, the government created the PPP, and authorized $349 billion under it in forgivable loans to small businesses for job retention and certain other expenses. Congress subsequently authorized an additional $300 billion in PPP funding.

To legally qualify for a PPP loan, a small business or non-profit organization must exist legitimately and have 500 or fewer employees (with certain exceptions). As part of the PPP application process, the borrower has to certify and document, among other things: (a) its average monthly payroll expenses and (b) its number of employees. The borrower must also promise that the PPP loan proceeds with be completely expended during a relatively brief period (24 weeks) and be used for business payroll, mortgage interest, rent or utilities, exclusively, and for no other purpose. Of the allowable expenses, at least 60% of the loan must be used for payroll.

PPP Fraud and Abuse
The SBA now is discovering that potentially tens of thousands of borrowers have abused or defrauded the PPP or misused loans obtained under that program. The OIG is finding many instances where someone created a fictitious entity to get a loan, overstated the number of employees or size of payroll to get a bigger loan than was permitted, or misused the proceeds for something other than the authorized expenses. As a result of such widespread misconduct, it is now possible for people with information about PPP fraud, waste, and abuse to report and receive a Whistleblower Reward for PPP Loan Fraud. In order to do so, you will need to file a federal lawsuit. Therefore, you should immediately consult and retain an experienced qui tam False Claims Act attorney.

WHAT ARE EXAMPLES OF POTENTIALLY GOOD PPP FRAUD CASES?
–Ineligible borrowers. This is often the easiest type of PPP case to prove. Certain types of organizations simply were not entitled to participate in the PPP program. They included: (a) private equity firms, hedge funds and venture capital firms; (b) certain 501(c) non-profits, such as social clubs and unions, (c) foreign lobbyists (“FARAs”) and Chinese affiliates, (d) current or former bankrupt companies or persons; (e) cannabis growers and sellers; (f) criminally indicted or convicted companies or owners and business engaged in unlawful activities; (g) businesses that did not exist or operate before February 15, 2020; (h) financial businesses, finance companies, mortgage lenders, pawn shops; (i) passive real estate investment companies; (j) insurance companies; (k) pyramid sales/marketing organizations; (l) private clubs with exclusionary policies; and (m) certain kinds of sexual performance clubs. Often knowledgeable “data miners” are able to locate ineligible PPP borrowers by analyzing online data and other publicly available information.
–Duplicate loans. Some borrowers used “smoke and mirrors” to make it appear they had more than one company, for example, using the same list of employees for two or more businesses.
–Affiliations. PPP loans were overseen by the Small Business Administration and were supposed to go to small businesses. That meant no more than 500 employees. Affiliated companies were supposed to add their employees together to see if they exceeded the maximum size.
–Overstated payroll expenses and employee headcounts (including counting 1099 Independent Contractors and non-US resident employees). This was done to get more PPP money than the loan formula allowed. This type of case often requires an insider who has access to the actual payroll account records.
–Misuse of proceeds. These cases usually require an insider who has access to bank accounts which show monies that were supposed to be used for PPP purposes (mostly payroll) were used for improper purposes.
–Lenders and Fin Techs. Employees of banks and financial institutions that processed PPP loan applications and forgiveness requests may be able to show that the very minimal loan underwriting requirements and obligations for the PPP program were not met.

WHAT KINDS OF PPP FRAUD CASES ARE USUALLY NOT GOOD FOR
WHISTLEBLOWER REWARD CASES, BUT WHICH YOU MAY WANT TO REPORT
TO AUTHORITIES ANYWAY?
–Fake companies (phony EINs, addresses and employees). If the company does not exist, it is hard to get a recoverable money judgment.

–Aggregators. These are people who convinced others to file bogus PPP loan applications and assisted in the application process for a flat fee and/or a percentage of the PPP funds. They are also hard to pin down and collect money from.
–Businesses or organizations that didn’t really need the money. Very often it is hard to prove that when the entity certified “Current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant” this was a false statement. After all there was extreme economic uncertainty on an international scale during the height of the COVID-19 crises. In rare cases, some businesses were sufficiently shielded from economic harm that they may be the exception to the rule.
–Persons who committed blatant criminal fraud but do not have the resources to pay the money back to the government.