A Jewish Voice for Peace, Inc., a nonprofit organization based in Washington, D.C., has agreed to pay $677,634 to settle allegations of violating the False Claims Act. The organization was accused of improperly applying for and receiving a $338,817 second-draw loan under the Paycheck Protection Program (PPP) of the CARES Act Disaster Relief Program and subsequently securing forgiveness for the entire loan amount.
The settlement was announced by U.S. Attorney Matthew M. Graves and U.S. Small Business Administration General Counsel Therese Meers. The CARES Act, established in March 2020, aimed to provide financial support to those affected by the COVID-19 pandemic through forgivable loans to small businesses and nonprofits struggling with payroll and other expenses.
Under the CARES Act provisions, entities primarily engaged in political or lobbying activities were not eligible for second-draw PPP loans. A Jewish Voice for Peace certified that it was not primarily engaged in such activities when applying for both the loan and its forgiveness. However, an investigation revealed that the organization was indeed primarily involved in political activities. The organization maintains that any misstatements made were inadvertent.
U.S. Attorney Graves emphasized the importance of maintaining integrity within relief programs: “The Paycheck Protection Act Program existed to help businesses survive a devastating global pandemic... In the end, those who are harmed are the businesses that actually qualified for and needed the money, and the taxpayers who funded the program.”
SBA General Counsel Therese Meers noted that this favorable settlement resulted from efforts by federal agencies working together with private individuals who exposed fraudulent conduct: “The favorable settlement in this case is the product of enhanced efforts by federal agencies such as the Small Business Administration working with... other Federal law enforcement agencies."
According to the False Claims Act, violators must pay three times any damages caused to the United States. If found liable under this act, A Jewish Voice for Peace would have faced penalties amounting to three times their loan plus interest and civil penalties per false certification made during applications. Instead, they settled by agreeing to pay double their original loan amount.
This resolution follows a federal investigation initiated after TZAC filed a whistleblower complaint under qui tam provisions of the False Claims Act. It is important to note that these resolved claims are only allegations; no liability determination has been made in this civil case.
Assistant U.S. Attorney Stephen DeGenaro led this investigation alongside Auditor Timothy Hurley from D.C.'s U.S Attorney’s Office with assistance from SBA's Office of General Counsel Attorneys Kandace Zelaya and Arlene Messengerlerner during negotiations related directly back into how whistleblowers can report potential fraud impacting COVID-19 government relief programs via Department Justice’s National Center Disaster Fraud Hotline or website forms available online at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form