On January 9, the U.S. Department of Justice (DOJ) announced that four agricultural companies and their owner will pay $600,000 to settle allegations that they violated the False Claims Act in Paycheck Protection Loan-related (PPP) issues.
The qui tam provisions of the False Claims Act enable private citizens to file lawsuits on behalf of the government if they know of an individual or company defrauding the government. Qui tam whistleblowers are eligible to receive between 15 and 30% of the government’s recovery, if one occurs.
The PPP was established with the passage of the Coronavirus Aid, Relief and Economic Security (CARES) Act to aid small businesses during the COVID-19 pandemic. Participating lenders processed PPP loan applications and funded approved loans, “which was fully guaranteed by the [Small Business Administration (SBA)].”
According to the press release, Mendota Land Co., Sweetwood Farm Co. LLC, Sweetwood Farm Inc., Seaholtz Co. LLC, and their owner John Seasholtz (collectively referred to as “Seasholtz”) “are alleged to have improperly inflated the employee headcount on the companies’ PPP loan applications by impermissibly including non-employee contract workers who were, in fact, employed by other, unrelated entities.” This means that Seasholtz allegedly included individuals who were not employees on their PPP loan applications and in turn received “approximately $1.8 million in excess PPP loans.”
The DOJ states: “Seasholtz previously repaid the excess...
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