against Laurie Holcomb, founder of multiple cannabis companies, alleging that she illegally obtained five pandemic-related loans from the federal government.
The United States alleges that Holcomb secured $1.4 million in federally-guaranteed Paycheck Protection Program loans, and subsequent forgiveness of the loans, by falsely certifying under penalty of perjury on loan applications that the businesses were not involved in illegal activity.
In fact, Holcomb and her companies were engaged in the cultivation, distribution, and retail sale of recreational cannabis and cannabis products, which is illegal under federal law.
Congress created the Paycheck Protection Program, or PPP, in March 2020, as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, to provide emergency financial support to eligible small businesses experiencing economic hardship caused by the COVID-19 pandemic. The Small Business Administration (SBA) administers the PPP.
Due to its status as a Schedule I controlled substance under the United States Controlled Substances Act, the manufacture, distribution, dispensation, and possession of cannabis, with the exception of use in federal government-approved research, is illegal under federal law. SBA eligibility rules generally excluded a business from eligibility for PPP loans if the business engaged in activities involving federally illegal cannabis, even if state law permitted cultivation or sale.
The government’s complaint alleges that Ms....
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