Valley National Bank Settles PPP False Claim Act Liability with Feds for $216,784
Valley National Bank Settles PPP False Claim Act Liability with Feds for $216,784
September 25, 2024
By Bob Coleman
Publisher & Founder
| SBA 7(a) | Rank $ | Rank # | Gross Loan Approval | # Loans |
| 6/24 (9 mos) | 77 | 130 | $53 million | 38 |
| FY 2023 | 132 | 147 | $36 million | 42 |
| FY 2022 | 162 | 177 | $29 million | 34 |
Valley National Bank, Tampa, Florida SBA 7(a) Lending Stats
Source: Coleman/Lumos Data
I believe this is the first false claim act PPP ineligible use of loan proceeds civil settlement by a lender.
Previously, Prosperity Bank settled a false claim for $18 million for lending to ineligible borrowers in 2022.
Currently, the only information available is from the Department of Justice press release and here are some key facts:
- An employee’s conduct of assisting a customer with an impermissible loan disbursement was self-reported by the lender to SBA.
- The DOJ acknowledged VNB “cooperated fully” with the investigation.
- The press release doesn’t address the issue but you have to assume the settlement is with no admission of wrongdoing by VNB.
From the Department of Justice September 23rd press release:
This settlement resolves VNB’s civil liability related to a bank customer who had applied for two PPP loans with VNB. VNB, through a bank relationship manager, assisted the customer in the impermissible use of a portion of the PPP loan proceeds from its first PPP loan to repay an outstanding loan to a third party.
After learning of this conduct, VNB conducted an independent investigation and review of those issues and provided the United States with a detailed and thorough written self-disclosure. VNB cooperated fully with the government’s investigation of the conduct, disclosing relevant documents, facts, and information gathered during its investigation.
Although PPP lending has ended, VNB took steps to remediate and improve the issues with its PPP lending policies and practices, including requiring PPP borrowers to open a deposit account to undergo depositor screening, retaining an accounting firm to serve as a PPP loan help desk, and utilizing a company to interface with the SBA E-Tran platform.
“The United States Attorney’s Office is committed to investigating and holding responsible those who failed to follow the rules of the PPP program,” says U. S. Attorney Roger B. Handberg for the Middle District of Florida. “We will continue to seek civil redress and, where appropriate, federally prosecute those individuals and entities that engage in improper uses of PPP loan proceeds.”
SBA’s General Counsel Therese Meers adds, “The favorable settlement in this case is the product of enhanced efforts by federal agencies such as the Small Business Administration working with the U.S. Attorney’s Office, other federal law enforcement agencies, as well as financial institutions or private individuals who uncover borrower misconduct to recover the lending program’s damages.”