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Home False Claims-Qui Tam

Whistleblower Alleges Public Relations Firm Wrongfully Received Second PPP Loan

Ana PopovichbyAna Popovich
October 17, 2022
in False Claims-Qui Tam
Reading Time: 3 mins read
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BVK, Inc., a public relations firm, will pay $2.25 million to settle allegations that it wrongfully received a second loan from the Paycheck Protection Program (PPP). The case was brought by a whistleblower under the False Claims Act’s qui tam provisions.

The qui tam provisions of the False Claims Act enable private citizens to file lawsuits on behalf of the government if they know of an individual or company defrauding the government. Qui tam whistleblowers are eligible to receive between 15 and 30% of the government’s recovery, if one occurs.

The PPP was established with the passage of the Coronavirus Aid, Relief and Economic Security (CARES) Act to aid small businesses during the COVID-19 pandemic. “Under the PPP, eligible businesses could receive loans guaranteed by the [Small Business Administration (SBA)] and, if the business spent the loan proceeds on qualified expenses, SBA would repay the loan on the borrower’s behalf,” the U.S. Department of Justice (DOJ) press release states.

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

BVK, based in Milwaukee, Wisconsin, “received both a first and second draw PPP loan.” The U.S. “alleges that at the time BVK applied for the second-draw loan, it was performing public relations work on behalf of the Dominican Republic Ministry of Tourism. According to the government, this work triggered a FARA-registration obligation, which in turn rendered BVK ineligible for a second-draw PPP loan.”

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

The whistleblower in the case will receive a portion of the settlement, though the press release does not disclose the award amount.

In September, the first settlement of a False Claims Act related to a PPP loan brought by a whistleblower occurred: read about the case on WNN here.

Senator Chuck Grassley (R-IA), who has been consistently championed as the “patron saint” of whistleblowers, proposed amendments to the False Claims Act in 2021 that would strengthen protections for whistleblowers and clarify existing law. The amendment was widely supported by whistleblower organizations and advocates. However, WNN sources discovered that the pharmaceutical lobby intervened with the amendment’s passage. The National Whistleblower Center (NWC) is urging Congress to protect the False Claims Act: learn more here.

Read the DOJ press release here. 

Read more False Claims Act/qui tam news on WNN here. 

Tags: False Claims / Qui TamFalse Claims ActPPPqui tam whistleblowers
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Ana Popovich

Ana Popovich

Ana Popovich is a contributing editor with Whistleblower Network News, where she writes about breaking whistleblower news, healthcare fraud whistleblowers, and Covid-19 fraud whistleblowers. Ana has a B.A. in English from Georgetown University. While at Georgetown, she was the marketing chair of an affinity group and wrote content for the McDonough School of Business’ Business for Impact program. In 2018, Popovich was a public interest legal intern at the whistleblower law firm Kohn, Kohn and Colapinto. 

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