The Department of Justice (“DOJ”) continues racking up more settlement agreements under the False Claims Act, 31 U.S.C. § 3729 et seq (“FCA”) with companies and individuals alleged to have improperly used funds received through the Paycheck Protection Program (“PPP” or “Program”). The latest PPP fraud settlement illustrates that attempts to fraudulently obtain forgiveness of PPP loans used for ineligible expenses invites potential liability under the FCA in addition to liability under its criminal counterpart, 18 U.S.C. § 287.
On March 25, 2022, the U.S. Attorney’s Office for the Eastern District of Washington announced a global criminal and civil settlement between the U.S. government and HPM Corporation (“HPMC’), Grover C. Mooers (“Mr. Mooers”), and Hollie P. Mooers (“Ms. Mooers”) (collectively, “Defendants”). This global criminal and civil settlement included a criminal Deferred Prosecution Agreement (“DPA”) and a civil FCA Settlement Agreement (“Settlement Agreement”) (collectively, “Agreements”). Under the Agreements, the government alleged that Defendants knowingly submitted false statements and certifications to the Small Business Administration (“SBA”) when seeking forgiveness of a PPP loan.
Specifically, the Defendants admitted the following facts in the Agreements: On April 3, 2020, HPMC, through Mr. Mooers, applied for a PPP loan, which required him to certify that the funds would be used for Program-eligible purposes, like payroll or certain mortgage interest...
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