Six nonprofit organizations in Virginia have agreed to pay a total of $1,381,646 to resolve civil fraud allegations related to Paycheck Protection Program (PPP) loans received during the COVID-19 pandemic. The organizations involved are Southampton Recreation Association, National Association of Telecommunications Officers and Advisors, Mid-Eastern Athletic Conference, Cheers, Metropolitan Business League, and Employee Activity Association.
Authorities allege that these groups were classified as 501(c)(4) entities and therefore did not qualify for PPP funding.
The settlements resulted from a joint effort by the U.S. Attorney’s Office for the Eastern District of Virginia and the U.S. Small Business Administration.
The case began with a lawsuit titled United States ex rel. The Tarbell Group, LLC. v. Cheers et al., filed under the whistleblower provision of the False Claims Act. This law allows private individuals to file lawsuits on behalf of the government concerning false claims made to federal agencies and receive a share of any recovered funds. In this instance, “the whistleblower in this matter received a ten percent share of each settlement.”
Assistant U.S. Attorney John Beerbower and former Assistant U.S. Attorney Gina Kim conducted the investigation.
According to the press release: “The civil claims settled are allegations only; there has been no determination of civil liability.”
Further information is available on the website of the U.S. Attorney’s Office for the Eastern District of Virginia, with case records accessible through PACER under case number 1:24-cv-849.
