Congress created the Paycheck Protection Program (PPP) as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act to provide forgivable loans to qualified businesses to maintain payroll and operations during the COVID-19 pandemic. Each PPP loan was calculated based on the applicant’s average monthly payroll and number of employees. Under the CARES Act, certain entities organized under Section 501(c) of the Internal Revenue Code were not eligible for PPP loans. Moreover, under the Small Business Administration’s regulations, private clubs that limit the number of memberships for reasons other than capacity were ineligible for PPP loans.

Heritage Hunt Homeowners Association, Inc. is an age-restricted community located in Gainesville that obtained a PPP loan of $397,600 in April 2020. Heritage Hunt paid $425,000, of which $255,000 was restitution, to settle allegations that it knowingly made, or knowingly caused to be made, false statements and certifications about its employee count, average monthly payroll, use of its PPP loan proceeds, and eligibility for its PPP loan.

Lake Caroline Property Owners Association is a homeowners’ association in Ruther Glen that was organized as a 501(c)(7) tax-exempt organization when it applied for a PPP loan of $169,400 in May 2020. Lake Caroline paid $225,000, of which $178,932.81 was restitution, to settle allegations that it knowingly made, or knowingly caused to be made, false certifications about its eligibility to...

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