ALEXANDRIA, VA – Six Virginia-based organizations have agreed to pay more than $1.38 million to resolve allegations that they improperly received Paycheck Protection Program loans during the COVID-19 pandemic.
Federal prosecutors said the settlements involved Southampton Recreation Association in Richmond, the National Association of Telecommunications Officers and Advisors in Alexandria, the Mid-Eastern Athletic Conference in Norfolk, Cheers in Richmond, the Metropolitan Business League in Richmond, and the Employee Activity Association in McLean.
According to the U.S. Attorney’s Office for the Eastern District of Virginia, the organizations were accused of falsely certifying eligibility for PPP loans despite being classified as 501(c)(4) entities, which were not permitted to receive the funding.
The six groups collectively paid $1,381,646 to resolve the civil fraud allegations.
Settlements stem from whistleblower lawsuit under False Claims Act
The settlements followed a lawsuit filed under the whistleblower provisions of the False Claims Act, titled United States ex rel. The Tarbell Group, LLC. v. Cheers et al.
The law allows private parties to bring lawsuits on behalf of the federal government for false or fraudulent claims and to receive a share of the recovered funds.
In this case, the whistleblower, The Tarbell Group, received a ten percent share of each settlement for its role in alerting the government to the alleged misuse of pandemic relief funds.
The U.S. Small Business Administration assisted in the investigation and resolution of the claims.
Six Virginia organizations repaid more than $1.38 million to settle federal allegations they improperly received pandemic-era PPP loans.