Evergreen Reporter

Americans For Peace Now, Inc., a Washington, D.C.-based nonprofit organization, has agreed to pay $261,890 to settle allegations of violating the False Claims Act. The allegations pertain to the organization's application for and receipt of a $130,945 second-draw loan under the Paycheck Protection Program (PPP) of the CARES Disaster Relief Program and its subsequent application for forgiveness of the entire loan amount.

The agreement was announced by U.S. Attorney Matthew M. Graves for the District of Columbia and Special Agent in Charge Amaleka McCall-Brathwaite of the U.S. Small Business Administration (SBA), Office of the Inspector General, Eastern Region.

In March 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was enacted to provide emergency financial support to Americans facing economic hardship due to the COVID-19 pandemic. The CARES Act authorized billions in forgivable loans to small businesses and other entities, including non-profit organizations, struggling with payroll and other business expenses. Under this act's provisions, entities primarily engaged in political or lobbying activities are not eligible for second-draw PPP loans.

At the time of applying for the second-draw PPP loan, Americans For Peace Now certified that it was "not a business concern or entity primarily engaged in political or lobbying activities." It also certified compliance with conditions for receiving the loan when applying for forgiveness. Americans For Peace Now maintains that any misstatements were inadvertent.

Under the False Claims Act, violators must pay three times the damage amount plus civil penalties. If found liable under this act, Americans For Peace Now would have been ordered to pay three times the loan amount plus lost interest and civil penalties. In connection with this settlement, Americans For Peace Now agreed to pay twice the loan amount ($261,890).

The settlement follows a Federal investigation initiated by a whistleblower complaint from public interest group TZAC under qui tam provisions of the False Claims Act. The claims resolved by this settlement are allegations only; no liability determination has been made in this civil case.

"Funds allocated for the Paycheck Protection Act Program had a specific purpose: get businesses eligible for the Program through the global pandemic," said U.S. Attorney Graves. "When ineligible businesses falsely claimed to be eligible, they harmed both taxpayers who funded the program and eligible businesses that needed it."

"Misusing SBA program funds is a serious violation that affects program integrity meant to support those in genuine need," said Special Agent McCall-Braithwaite. "This settlement reflects our commitment to holding accountable those who seek to exploit government resources."

"The favorable settlement is due to enhanced efforts by federal agencies such as SBA working with U.S. Attorney’s Office and other law enforcement agencies," said SBA General Counsel Therese Meers.

The civil settlement resulted from an investigation by Assistant U.S. Attorney Stephen DeGenaro and Auditor Timothy Hurley of U.S. Attorney’s Office for D.C., with assistance from Attorneys Gary Fox and Kandace Zelaya of SBA’s Office of General Counsel.

Tips on potential fraud affecting COVID-19 relief programs can be reported via DOJ's National Center for Disaster Fraud Hotline at (866) 720-5721 or online at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.