On March 20, the U.S. Department of Justice (DOJ) announced that concrete manufacturer Speed Fab-Crete Corporation has agreed to pay $1,817,546.25 to resolve allegations that they violated the False Claims Act (FCA) by applying for and receiving a loan that they were ineligible for through the Small Business Administration (SBA). Whistleblower Aidan Forsyth brought this allegation forward in a qui tam lawsuit.
Speed Fab-Crete Corporations applied for the SBA’s Paycheck Protection Program (PPP) loans. The PPP was a part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act from March 2020 that provides emergency loans to small businesses struggling because of the pandemic. Speed Fab-Crete applied and received this loan in 2020 for the principal amount of $1,170,000.
The DOJ alleges that it was ineligible through SBA rules due to its owners facing criminal charges. According to the government, “SBA rules disqualified a business from PPP eligibility if any owner of 20% or more of the business’s equity was subject to criminal charges.”
“This office is committed to finding and recovering PPP funds that were obtained by ineligible recipients during the pandemic,” said Acting United States Attorney Chad E. Meacham. “We will continue to investigate and take action as necessary to reclaim those funds on behalf of the American taxpayer.”
Aidan Forsyth filed this complaint under the False Claims Act qui tam provisions. This permits private parties to file suit on behalf of the government if they know that a company is defrauding the government. Qui tam whistleblowers are eligible to receive a portion between 15 and 30% of the government’s recovery. In this case, Forsyth will receive 15% of the government’s recovery as part of the settlement.
During FY 2024, settlements and judgments under the False Claims Act exceeded $2.9 billion and over $2.4 billion of the recoveries stemmed from qui tam whistleblower lawsuits. Furthermore, according to the government, a record 979 qui tam lawsuits were filed in FY 2024.
However, in September 2024, a district judge in Florida ruled that the False Claims Act’s qui tam provisions were unconstitutional. The U.S. federal government is urging the U.S. Court of Appeals for the Eleventh Circuit to reverse that decision, stating in a brief that “other than the district court here, every court to have addressed the constitutionality of the False Claims Act’s qui tam provisions has upheld them.”
National Whistleblower Center has issued an Action Alert allowing whistleblower supporters to write the members of Congress urging them to protect and strengthen and protect the False Claims Act.
The claims asserted in this case are allegations only, and there has been no determination of liability.
Join NWC in Taking Action:
Strengthen the False Claims Act and Protect it From Attack
Further Reading:
North Texas Concrete Manufacturer Settles PPP Lawsuit for $1.8 Million
