January 26, 2024
Fraud Friday – Whistleblower False Claims Act Lawsuit Dismissed for Two PPP Loans
Former employees at ManPow, LLC, accused the real estate company of obtaining PPP loans and loan forgiveness through false statements and certifications. They claimed the company falsely reported payroll expenses and the number of employees in its applications.
The initial PPP loan application requested over $1.4 million, stating average monthly payroll costs of $560,244 and 41 employees. However, the company actually had 142 employees. Despite the error, the SBA would have issued the same loan amount.
For the Second Draw PPP loan, the company again used the same payroll data but reported having 110 employees when it had 114.
The employees alleged the company falsely stated that none of its affiliates received PPP loans, although one did. However, the affiliate’s 10 employees didn’t affect the loan approval.
Despite the lawsuit, the SBA hasn’t reconsidered loan forgiveness or requested further review or return of loan proceeds. The SBA Deputy Director confirmed ManPow’s compliance with all requests for documentation.
While errors occurred in the applications, they weren’t considered significant, and the whistleblowers failed to provide adequate evidence to dispute the findings. This case sets a precedent for future PPP litigation under the FCA whistleblower provision.