Two Michigan Nonprofits Settle FCA Allegations of Improper Receipt of PPP Loans

Two Michigan nonprofit organizations have agreed with the DOJ to settle False Claims Act allegations that the organizations applied for and obtained Paycheck Protection Program (PPP) loans for which the organizations knew or should have known they were ineligible.  The settlements will resolve a qui tam lawsuit that was filed in the U.S. District Court for the Western District of Michigan by a research and educational institute.

The lawsuit alleged that during the period covered by the lawsuit, certain nonprofit organizations were ineligible to receive PPP loans under the applicable rules.  Both organizations allegedly fell under these categories but still applied for and received loans that they knew or should have known they were not eligible.  As a result, the SBA paid lender fees on funds that the organizations allegedly should not have obtained. 

The organizations neither admit nor deny the lawsuit’s allegations.  Each organization fully repaid their loan proceeds in December 2020, and will now individually pay settlements of $115,265 and $110,622 respectively.