Whistleblower claims PR firm wrongly received second PPP loan

BVK, Inc., a public relations firm, will pay $2.25 million to settle allegations that it improperly obtained a second Paycheck Protection Program (PPP) loan. The case was brought by a whistleblower under the False Claims Act qui tam provisions.

That qui tam The provisions of the False Claims Act allow individuals to file claims on behalf of the government if they know of an individual or entity that is defrauding the government. Qui tam Whistleblowers are entitled to between 15% and 30% of government compensation should it occur.

The PPP was established with the passage of the Coronavirus Aid, Relief and Economic Security (CARES) Act to help small businesses during the COVID-19 pandemic. “Under the PPP, eligible companies could receive loans guaranteed by the [Small Business Administration (SBA)] and if the company were to spend the loan proceeds on qualifying expenses, the SBA would repay the loan on behalf of the borrower,” the US Department of Justice (DOJ) press release said.

According to the DOJ, in December 2020, Congress authorized certain recipients of a previous PPP loan to “receive an additional second-drawing loan.” These loans “contained additional eligibility requirements, including a rule that any organization required to register with the Attorney General under the Foreign Agents Registration Act (“FARA”) could not receive a second drawing loan. A FARA registration requirement is triggered by certain work performed on behalf of foreign governments.”

BVK, based in Milwaukee, Wisconsin, “received both a first draw and a second draw PPP loan.” The US “alleges that BVK was doing public relations work on behalf of the Dominican Republic’s Department of Tourism at the time the second-draw loan was applied for. According to the government, this work triggered a FARA registration requirement, which in turn resulted in BVK being ineligible for a second draw PPP loan.”

However, when applying for the second-draw loan, BVK “did not disclose its FARA registration requirement.” BVK “received a $2 million loan that SBA later repaid.”

The whistleblower in the case receives part of the severance pay, although the press release does not disclose the amount of the award.

September saw the first settlement of a False Claims Act relating to a PPP loan filed by a whistleblower: read more about the case below WNN here.

Senator Chuck Grassley (R-IA), consistently championed as the “patron saint” of whistleblowers, proposed amendments to the False Claims Act in 2021 that would strengthen whistleblower protections and clarify applicable law. The change was widely supported by whistleblower organizations and advocates. However, WNN Sources discovered that the pharmaceutical lobby intervened in passing the amendment. The National Whistleblower Center (NWC) calls on Congress to protect the False Claims Act: Learn more here.

Read the DOJ press release here.

Continue reading False Claims Act/qui tam messages to WNN here.