Covid Relief Fraud Contributing to Spike in False Claims Act Cases

By Chris McCarty | March 2, 2022

The Department of Justice announced February 1st that the 2021 fiscal year resulted in more than $5.6 billion in False Claims Act settlements and judgments, the second most in the Act’s history. (LINK to DOJ Press Release on $5.6 Billion in 2021 False Claims Settlements). The growing number of False Claims suits is due in large part to a new but consistent culprit: fraudulently obtained and/or misused federal Covid relief funds.

On February 11th, the DOJ announced that a staffing services business, Zen Solutions, agreed to pay approximately $31,000 in damages and civil penalties for violating the False Claims Act by obtaining more than one Paycheck Protection Program loan during 2020. (LINK to DOJ Press Release on Northern Virginia False Claims Settlement). Congress created the PPP in March 2020 as part of their Covid relief for small businesses; however, loan applicants were required to certify they would not receive more than one PPP loan prior to December 31, 2020. (LINK to Story on PPP Loans). “[P]ursuing PPP loan fraud is a high priority for our office,” stated federal attorney Jessica D. Aber. If you are aware of any business that has fraudulently sought or used federal funds, please reach out to us today.

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