Does the FBI Investigate PPP Loans?
Yes, in some circumstances. For example, when a whistleblower files a qui tam lawsuit under the False Claims Act to trigger a PPP investigation, the FBI can investigate whether fraud occurred. The FBI ordinarily coordinates with other federal and state agencies, such as the DOJ and the SBA, during the investigation.
How the FBI Conducts A PPP Investigation
The FBI investigates PPP loan fraud by reviewing allegations in a qui tam case, conducting interviews, and pulling financial records. They work closely with the Small Business Administration (SBA), the Department of Justice (DOJ), and other federal entities to track down fraudulent activity. Fraud does not have to be as blatant as inflating payroll expenses or using fake businesses to receive PPP funds. Even a company who was merely ineligible for the funds may be investigated. Those found guilty of PPP loan fraud can face severe penalties, including fines, restitution, and imprisonment.
Real-Life Example of PPP Investigation Involving Loan Fraud
A real-life example of PPP loan fraud investigated by the FBI involves AtlantiCare Health System, a health system in Atlantic County, New Jersey. The health system was alleged to have received improper PPP loan funds by inflating their payroll numbers to qualify for a larger loan amount. The case was brought to light by a whistleblower, known as a relator, who filed a lawsuit under the False Claims Act. The whistleblower’s actions led to a settlement in which AtlantiCare agreed to pay $3.7 million to resolve the allegations. The relator received a portion of the settlement as a reward for their role in uncovering the fraud.
Whistleblower Protections and Rewards
Whistleblowers who file qui tam suits alleging PPP loan fraud are protected under federal laws like the False Claims Act. These laws not only protect whistleblowers from retaliation but also provide financial incentives for reporting fraud. In cases where the government recovers funds through a settlement or judgment, the whistleblower, or relator, may be entitled to receive a percentage of the recovered amount.
If you suspect fraud related to PPP loans, it is essential to contact an attorney. The FBI and other federal agencies rely on whistleblowers to identify and stop fraudulent activities. Filing a qui tam suit with information about fraudulent PPP activity helps ensure that financial aid programs like the PPP serve their intended purpose of supporting legitimate businesses and employees during times of need.
