News & Analysis as of

Paycheck Protection Program (PPP) Lenders False Claims Act (FCA)

Whiteford

Client Alert: Heightened Enforcement Risk for Ineligible Recipients of Paycheck Protection Program Loans

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The United States Department of Justice (“DOJ”) has intensified civil fraud investigations aimed at borrowers who obtained Paycheck Protection Program (“PPP”) loans despite falling outside the class of entities Congress meant...more

Orrick, Herrington & Sutcliffe LLP

Supreme Court False Claims Act Ruling May Affect Paycheck Protection Program Lenders

On June 1, the Supreme Court ruled that entities that submit false claims to the government can be liable if they subjectively believed the claims were false at the time of submission. ...more

Fox Rothschild LLP

Federal Reserve Board Fines Bank for Processing PPP Loans That Had Signs of Fraud

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In its first enforcement action related to COVID-19 government aid programs, the Federal Reserve Board recently announced that it has fined New York-based Popular Bank $2.3 million for processing Paycheck Protection Program...more

Fox Rothschild LLP

House Subcommittee Singles Out Fintech Companies, Government Officials and PPP Lenders for Roles in COVID-19 Related Fraud

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The House Select Subcommittee on the Coronavirus Crisis, chaired by Rep. James E. Clyburn, released the final report on its investigation into the use and distribution of $5 trillion in federal pandemic-related aid,...more

Goodwin

U.S. Attorney's Office Settles False Claims Act Allegations with Paycheck Protection Program Lender

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On September 13, 2022, the U.S. Attorney’s Office (USAO) for the Southern District of Texas announced ​that it had reached a settlement with a bank that served as a lender under the Paycheck Protection Program (PPP) to...more

Jenner & Block

Government Contracts Legal Round-Up | 2022 Issue 18

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Welcome to Jenner & Block’s Government Contracts Legal Round‑Up, a biweekly update on important government contracts developments. This update offers brief summaries of key developments for government contracts legal,...more

Dorsey & Whitney LLP

DOJ Announces First-In-The-Nation False Claims Act Settlement with PPP Lender

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​​​​​​​The government has been actively investigating and prosecuting Paycheck Protection Program (“PPP” or the “Program”) fraud ever since the Small Business Administration (“SBA”) rolled out the Program in the Spring of...more

Bass, Berry & Sims PLC

Government Announces First FCA Settlement with PPP Lender

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The Department of Justice (DOJ) announced on September 12, the first-ever False Claims Act (FCA) settlement with a Paycheck Protection Program (PPP) lender. Prosperity Bank, a Texas-based regional bank, agreed to pay...more

Fox Rothschild LLP

Justice Department Announces First False Claims Act Settlement With PPP Lender and Unveils New COVID-19 Fraud Strike Force Teams

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The Justice Department has announced the first-ever False Claims Act settlement with a lender to resolve allegations related to processing a Paycheck Protection Program loan on behalf of an ineligible customer. This...more

Tucker Arensberg, P.C.

PPP Lenders Beware: The DOJ Secured A First-Of-Its-Kind FCA Settlement

Tucker Arensberg, P.C. on

​​​​​​​In response to “a series of sensational congressional investigations into the sale of provisions and munitions to the War Department” where “the United States had been billed for nonexistent or worthless goods, charged...more

Bilzin Sumberg

Fintechs Face DOJ, House Scrutiny Over PPP Lending

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In a June 3, 2022 court filing, Kabbage, Inc. (doing business as KServicing), a fintech lender, disclosed that it is under investigation by the U.S. Department of Justice (“DOJ”) under the False Claims Act. The investigation,...more

Dorsey & Whitney LLP

False Claims Act Case Tracker for Paycheck Protection Program Fraud - Update

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In the Spring of 2020, the Small Business Association (“SBA”) began administering the Paycheck Protection Program (the “PPP” or the “Program”) to provide SBA-backed loans to help eligible businesses maintain their workforces...more

ArentFox Schiff

PPP Loan Recipients at Risk: Part Three

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In our closing episode on COVID-19 related financial fraud, Scott Peeler, Lynn Fiorentino, and Susan Tran from our Government Enforcement & White Collar group focus the discussion on how to best prepare if the government...more

Buchalter

Buchalter COVID-19 Client Alert: Entrapment-by-Estoppel: A Potential Future Defense for Lenders in PPP Fraud Cases

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The past decade has taught lenders much about regulatory enforcement risk. In the fallout of the 2008 financial crisis and collapse of the housing and related markets, the Department of Justice and other agencies...more

Ballard Spahr LLP

PPP Lenders and Fraudulent Borrowers: False Claims Act Liability and AML Risk

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Can BSA/AML Requirements Lead to Deemed Knowledge of Borrower Fraud? The first two weeks of August brought a milestone of sorts in the ongoing recovery from the economic downturn brought on by the COVID-19 pandemic. The...more

Williams Mullen

Williams Mullen's COVID-19 Comeback Plan: Preparing Today for Tomorrow's PPP Audit

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Part of the 2020 Business Solutions Series presented by by the Hampton Roads Alliance and Williams Mullen Charles E. “Chuck” James, Jr., co-chair of both the Firearms Industry Group and the White Collar & Investigations...more

Goodwin

Financial Services Weekly Roundup: Treasury And SBA Codify Changes To PPP Flexibility Act

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In This Issue. The U.S. Department of the Treasury (Treasury) and the Small Business Administration (SBA) released an interim final rule to reflect changes made by H.R. 7010, the Paycheck Protection Program Flexibility Act,...more

Goodwin

U.S. Paycheck Protection Program Lenders: Risks of False Claims Act Enforcement Actions

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Congress has recently updated the Paycheck Protection Program (PPP) to stabilize the economy in response to the troubling economic impact of the COVID-19 pandemic. Lenders should be aware that the federal government’s efforts...more

Skadden, Arps, Slate, Meagher & Flom LLP

Enforcement Risks and the CARES Act

The Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, which was signed into law on March 27, 2020, provided for the establishment and expansion of a range of economic assistance programs designed to help...more

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