Paycheck Protection Program (PPP) Fraud

We represent whistleblowers — including several whose identities are currently protected by the False Claims Act — who have reported PPP fraud to the Department of Justice. During the initial emergency caused by the COVID-19 pandemic, many businesses were closed and unable to operate due to public health restrictions and safety concerns. These included businesses like gyms, restaurants, coffee shops, and others.

To help struggling businesses and incentivize them not to lay off employees, Congress created the PPP program, a system where small businesses could apply for loans guaranteed by the government to help offset the cost of payroll, benefits, rent, and other limited expenses. After being approved to obtain the money, if the business then proved it had used the money as promised, it could receive forgiveness of the loan.

The PPP program — totaling roughly $800 billion — relied on private banks to assess whether applicants were eligible recipients of these loans, and approved loans at breakneck speed with minimal oversight. Unfortunately, fraudsters took advantage, applying for loans they weren’t entitled to, using the money for their own benefit, screwing over their employees, and trying to leave the government and taxpayers with the bill.

Our public successes and ongoing cases pursuing PPP fraud include:

• U.S. ex rel. Nunez-Unda v. Lafayette RE Management et al. – represented an executive who reported his former employer for fraudulently misrepresenting their need for Paycheck Protection Program (PPP) loans during the COVID pandemic, resulting in intervention by the Department of Justice and a $680,000 settlement.
• U.S. ex rel. Craig v. Hawthorne Machinery et al. – representing a former employee reporting his former employer by claiming to have fewer employees than they actually had to be eligible for a PPP loan. After government declination, defeated defendants’ motion to dismiss and in discovery.

We also represent clients who have confidentially reported millions of dollars in PPP fraud in a variety of contexts:

• Claiming to use PPP money to pay employees, and instead using it for unauthorized personal purposes like paying off personal debt, executive bonuses, and lavish gifts.
• Applying for multiple PPP loans claiming to be multiple small businesses, when the businesses were actually one commonly owned and managed group of affiliates ineligible for small business loans.

We are experienced in and passionate about helping clients to assess potential whistleblower claims related to PPP fraud, developing the case, working with the government, and if necessary litigating on behalf of the government.

Note: This page may include matters and descriptions of work completed prior to joining Law Office of Max Rodriguez PLLC.

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