Thursday, February 4, 2021
The long-anticipated wave of civil enforcement actions involving participants in the Paycheck Protection Program (PPP) has begun.
On 12 January 2021, the U.S. Department of Justice (DOJ) announced the first civil settlement resolving fraud allegations against SlideBelts, Inc. (SlideBelts), a California e-retailer and manufacturer of fashion accessories, and its President and CEO, Brigham Taylor.
1 As we have discussed in prior alerts,
2 aggressive criminal and civil enforcement activity targeting PPP borrowers was a foregone conclusion given the minimal safeguards initially imposed by the U.S. Small Business Administration (SBA), the speed with which lenders disbursed loan proceeds, and reports indicating that more than US$4 billion in PPP funds are likely attributable to fraud.
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In a sign of things to come, on January 12, 2021, the Department of Justice (DOJ) announced the first civil settlement to resolve fraud claims involving loan recipients under the Paycheck Protection Program (PPP). We noted back in October that over 50 criminal cases related to COVID-19 fraud had been filed, and that the Treasury Department and the Small Business Administration (SBA), in addition to the DOJ, were formulating plans to review potential fraud and abuse of the PPP program and other COVID-19 relief measures.
Lenders made more than 5.2 million loans totaling more than $525 billion under the PPP through August 2020, and a second-round of PPP loans, including eligibility for companies who had already received loans in the first round, was announced late last year. Given the volume of the loan funds distributed in just a few months under emergency circumstances, the government focused on pushing the money out a
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After bringing dozens of criminal charges against Paycheck Protection Program loan recipients in recent months, on January 12, the US Department of Justice announced its first civil settlement resolving allegations of PPP loan fraud. Pursuant to the settlement agreement, SlideBelts, an internet retail company and debtor in bankruptcy, and its president and CEO, Brigham Taylor, agreed to pay a combined $100,000 to resolve claims that they violated the False Claims Act and the Financial Institutions Reform, Recovery and Enforcement Act of 1989. SlideBelts also repaid the $350,000 PPP loan that it received.
On January 12, 2021, the Eastern District of California settled the first False Claims Act (“FCA”) case based on Paycheck Protection Program ("PPP")-related fraud. SlideBelts Inc. – a.
On Tuesday, January 12, 2021, the U.S. Attorney’s Office for the Eastern District of California announced the first, and long-anticipated, civil settlement resolving allegations of.