Whistleblowers Can Earn Significant Awards for Reporting PPP Loan Fraud
What is the Paycheck Protection Program?
The PPP is part of the Coronavirus Aid, Relief and Economic Security (CARES) Act, which is a massive stimulus package designed to help businesses to survive the recent downturn in the economy. The PPP provides businesses with loans intended to cover payroll costs, mortgage payments, rent, and utilities. In many cases, these loans are forgivable if certain requirements are met.
What is the False Claims Act?
The False Claims Act is a federal law which allows private citizens to file lawsuits (known as qui tam actions) on behalf of the United States against companies and individuals who have defrauded the government. The False Claims Act is one of the primary tools the government uses to detect and stop fraud. Without the False Claims Act and the help of private citizens, much of the fraud being committed against the United States would go undiscovered.
How much can a whistleblower earn under the False Claims Act?
The False Claims Act allows a whistleblower to earn between 15 and 30 percent of the amount of money that the government recovers from the fraud reported by a whistleblower. The percentage awarded to a whistleblower depends on a number of factors, including whether the government intervenes in (or takes over) the case as well as the quantity and quality of the information provided by the whistleblower. In many cases, whistleblowers can earn millions of dollars by filing a False Claims Act lawsuit.
It is important to note that the False Claims Act provides the additional benefit of protecting employees from retaliation. Employees who are retaliated against for reporting fraud can sue their employer under the False Claims Act for significant damages.
What types of PPP loan fraud are there?
PPP loan fraud can occur in a variety of ways. The most obvious type of PPP loan fraud occurs where a loan borrower lied about having a business in order to obtain a loan. The government has also been targeting business owners who lied about the number employees they have in order to obtain a larger amount of loan money. While these are obvious types of PPP loan fraud, the fraud isn’t as apparent in most cases.
The amount of loan money a borrower can receive from a PPP loan is determined by an exact calculation. Specifically, businesses can apply to receive 2.5 times their monthly payroll (up to $100,000). If a borrower intentionally fudges the numbers on these calculations in order to receive more money, the borrower has committed fraud. The PPP also requires borrowers to provide paperwork to support their calculations (such as tax documents). If these supporting documents are not accurate, the borrower has also likely committed fraud.
Another issue that will likely spark many PPP fraud investigations is the good-faith certification. In order to receive PPP loan money, a borrower must certify in good faith that the loan request is necessary to support ongoing business operations due to current economic uncertainty. If the borrower’s business wasn’t economically hurt by the COVID-19 pandemic, or if the borrower has other sources of funding to help their business, the borrower may have committed fraud by falsely certifying that the loan was necessary.
Another potential type of PPP loan fraud concerns loan forgiveness. While PPP loans can be forgiven, the government requires borrowers to meet strict requirements to obtain this benefit. One of the chief requirements is that forgiveness only applies to expenses related to payroll costs, rent, mortgage interest, and utility payments. In addition, these expenses must have been incurred within eight weeks from the date the loan originated. If a borrower applies for loan forgiveness when the money was spent on other expenses, or if the borrower does not have proper documentation of how the money was spent, the borrower may have committed fraud.
How does a whistleblower earn a reward?
Who can qualify as a whistleblower?
How much are whistleblowers paid?
How can I blow the whistle on PPP loan fraud?
A whistleblower can stop PPP fraud and earn a substantial monetary award by filing a False Claims Act lawsuit. While almost anyone with knowledge of the fraud can be a whistleblower under the False Claims Act, a whistleblower is typically someone with first-hand knowledge of the fraud (such as an employee, customer, or competitor of the business committing the fraud)
If you believe that a business or business owner has committed PPP loan fraud, your first step is to hire an experienced whistleblower lawyer. A lawyer will analyze your case to determine if it is a viable False Claims Act case and help you weigh the pros and cons of filing a whistleblower lawsuit. A lawyer can also take steps to make sure that you are not implicated in any illegal activity that maybe taking place at a business. While a whistleblower should take a number of steps when filing a False Claims Act lawsuit, a whistleblower can assist his or her attorney in a PPP fraud case by doing the following things:
- Hire an experienced whistleblower lawyer.
- Gather any documents in your possession that relate to the business and the PPP loan application.
- Collect any written or electronic communication in your possession that may show the borrower’s intent to commit fraud.
- Provide a list of employees who you believe were used to calculate the loan amount.
- Be prepared to explain in detail how the fraud occurred and when the fraud occurred.
Your lawyer will review all of the relevant documents and begin to build a case against the offending loan borrower. Sometimes the initial information and documents provided by a whistleblower will be enough to put together a strong case. In other cases, additional investigative work will need to be done. If your lawyer believes that there is a strong case against the loan borrower, he or she will likely alert the government to the fraud before filing a lawsuit against the loan borrower in federal court.
Once the lawsuit is filed, your lawyer will work closely with the government to investigate the fraud and litigate the case against the borrower. If the case results in a settlement or judgment against the loan borrower, your lawyer will work hard to ensure that you receive the largest award possible.
A recent review from avvo.com:
“The absolute best Whistleblower Attorney you can hire!! ⭐⭐⭐⭐⭐
$15M Settlement! Page is an amazing, brilliant and exceptionally talented attorney. He represented me in a Whistleblower False Claims Act case which resulted in a $15M settlement with Z Gallerie, a major US furniture retailer who evaded paying anti-dumping duties to US Customs and Border Protection for many years. My award was a life changing $2.4 Million. Page has long standing, established relationships with the Department of Justice and knows exactly how to navigate the complexities of pursuing such a case with the government. The detailed and precise complaint he prepared and submitted to the US Department of Justice is one for the record books, truly amazing. The Government immediately took up the case with much enthusiasm. Page was engaged with the US Attorneys throughout the entire process. Words alone can not express the gratitude I have for Page Pate!”
Kelly W., a former client
- April 23, 2020Federal laws and regulations require nursing homes and assisted living facilities to take special precaut...September 26, 2019Our whistleblower lawyers filed a qui tam complaint several years ago that lead to a $108 million settlem...April 24, 2018The Department of Justice recently announced an $11.5 million settlement with a Texas-based radiation the...April 1, 2018In an interview with the Daily Report, Page Pate discusses the $10.5 million settlement our firm helped o...March 25, 2018Our experienced whistleblower attorneys helped secure a victory for our clients, the taxpayers and advoca...March 24, 2018The Department of Justice recently announced a big settlement with a Japanese manufacturer in a serious c...