On March 12, the U.S. Attorney for the Eastern District of Michigan that the owners and operators of The Detroit Club agreed to pay $357,669 to resolve allegations that they violated the False Claims Act through Paycheck Protection Program (PPP) loan fraud.
A whistleblower brought forward the allegations in a qui tam lawsuit and is set to receive $71,533.96 from the settlement.
According to the DOJ, the owners and operators of The Detroit Club, “a hotel, social club, and restaurant in Downtown Detroit,” applied for two PPP loans and later “certified that all their PPP loan proceeds were spent on eligible expenses and, as a result, both loans were fully forgiven.”
However, the government “contends that Defendants did not spend all their PPP funds on expenses that were eligible for forgiveness” and “obtained forgiveness of $167,040 for building lease expenses that were not eligible for forgiveness under the applicable rules.”
“The False Claims Act is an important tool to deter and hold accountable those who defraud the government,” said Acting U.S. Attorney Julie A. Beck for the Eastern District of Michigan. “Entities who took advantage of the COVID-19 pandemic to commit fraud against the government will be vigorously investigated by our office.”
The False Claims Act’s qui tam provisions enable private citizens and private parties to file lawsuits on behalf of the government if they know of an individual or company defrauding the government. Qui tam whistleblowers are...
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