The Paycheck Protection Program allowed nonprofit organizations and some small businesses to get loans over the past year in order to stay afloat.
While most loans went to deserving places, some executives and unscrupulous businesses or individuals stepped in to make false claims. This led to them receiving support that they did not need, thus depriving other individuals of the aid.
How borrowing from PPP works
Paychex discusses what PPP loans are and how some individuals and entities took advantage of them. Applicants for a PPP loan had to complete the Borrower Application Form. One part of the form made the signer clarify that they needed PPP funding to continue operations. Those who made false claims can end up charged with fraud under the False Claims Act.
This act ensures individuals or business entities that lie to the government may face penalties and damages. The law is already cracking down and processing cases of fraudulent borrowing.
Qui Tam lawsuits remain an option for potential whistleblowers, too. Many employees, family members and business partners may wonder what to do after discovering that someone has gotten involved in PPP fraud.
How do Qui Tam lawsuits work?
Qui Tam lawsuits allow for individuals to report any suspected false claims to the government. If the government then finds that these claims are true, the person who filed the Qui Tam receives a portion of the funds. Not only does this act as an incentive, but it can also cover legal funds that the whistleblower may need.
It is one potential option to consider when deciding how to approach a very complex and stressful situation. It is also wise to gain counsel from an attorney to decide what to do.