Six nonprofit organizations in Virginia have agreed to pay a total of $1,381,646 to resolve allegations that they were not eligible for Paycheck Protection Program (PPP) loans received during the COVID-19 pandemic. The organizations involved are Southampton Recreation Association in Richmond, National Association of Telecommunications Officers and Advisors in Alexandria, Mid-Eastern Athletic Conference in Norfolk, Cheers in Richmond, Metropolitan Business League in Richmond, and Employee Activity Association in McLean.
The central allegation was that each organization operated as a 501(c)(4) entity, making them ineligible for PPP funding. The settlement resulted from efforts by the U.S. Attorney’s Office for the Eastern District of Virginia and the U.S. Small Business Administration.
The case began with a lawsuit filed under the whistleblower provision of the False Claims Act: United States ex rel. The Tarbell Group, LLC. v. Cheers et al., case number 1:24-cv-849. This provision allows private parties to file suit on behalf of the United States regarding false claims made to the federal government and share part of any recovery by the government. In this matter, the whistleblower received ten percent of each settlement.
Assistant U.S. Attorney John Beerbower and former Assistant U.S. Attorney Gina Kim investigated the matter.
According to officials: “The civil claims settled are allegations only; there has been no determination of civil liability.”
Further details can be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia and through PACER records under case number 1:24-cv-849.
