The United States Attorney for the District of Columbia announced that six non-profit organizations have agreed to pay more than $3 million to settle allegations of violating the False Claims Act related to loans received through the Paycheck Protection Program (PPP). The announcement was made by U.S. Attorney Jeanine Ferris Pirro.
The PPP was established under the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2020 to help businesses and certain organizations cover payroll and other expenses during the COVID-19 pandemic. While some nonprofit groups were eligible for these loans, entities organized under Section 501(c)(4) of the Internal Revenue Code were not permitted to receive them. Additionally, Congress barred organizations primarily engaged in political or lobbying activities from receiving "second draw" PPP loans.
According to authorities, the six nonprofits falsely certified their eligibility when applying for these loans. “You don’t steal money from the federal government, especially when that money should be going to more deserving individuals,” said U.S. Attorney Jeanine Ferris Pirro.
SBA General Counsel Wendell Davis stated: “The favorable settlements are the product of enhanced efforts by the Small Business Administration’s Office of General Counsel, working with the U.S. Attorney’s Office and other Federal law enforcement agencies to investigate and recover monies improperly obtained from the Paycheck Protection Program, as well as penalties.”
The following organizations entered into settlement agreements:
- Armenian National Committee of America Inc., a Section 501(c)(4) group representing Armenian-Americans on public policy matters, will pay $184,681.82 after receiving a $92,340.91 loan.
- Center for Immigration Studies, a Section 501(c)(3) think tank focused on immigration policy research, will pay $401,299.15 after obtaining a $366,160 "second draw" loan.
- Diplomatic and Consular Officers Retired Inc., a Section 501(c)(4) organization promoting international affairs understanding, will pay $355,306 after receiving a $203,032 loan.
- National Organization for Women (NOW), a Section 501(c)(4) feminist activist group, will pay $180,678 after getting a $90,339 loan.
- National Women’s Political Caucus Inc., another Section 501(c)(4) group supporting women candidates in politics, will pay $34,954 after two loans totaling about $17,477.
- Third Way, described as a national think tank and advocacy organization under Section 501(c)(4), will pay $1,949,542 after securing a $974,771 loan.
Investigations leading to these settlements were conducted by Assistant United States Attorney Sean M. Tepe and Auditor Timothy C. Hurley. The U.S. Attorney also commended Caitlin J. Kelly from the Small Business Administration's Office of General Counsel for her assistance.
Authorities encourage reporting suspected fraud involving COVID-19 relief programs through the Department of Justice’s National Center for Disaster Fraud Hotline at (866) 720-5721 or via an online complaint form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
Officials emphasized that all claims resolved are allegations only; there has been no determination of liability.
