Businesses throughout Arizona and the rest of the country have been struggling to stay afloat ever since the COVID-19 pandemic reached the United States. Arizona is slowly reopening the state, including non-essential businesses. Thousands of businesses applied for and received Paycheck Protection Program (PPP) loans from the federal government to help prevent laying off employees.
What is PPP?
Businesses have been able to apply for PPP loans from the Small Business Association (SBA) ever since the pandemic reached the country. These loans are intended to help businesses keep employees on their payroll instead of issuing layoffs to remain operational. The loans are mediated by the banks and some might be able to be forgiven at a later date. The loans from the SBA are not meant for companies that are part of a large chain or for corporations that are publicly traded.
Sadly, some companies have lied on their applications in order to receive money from the PPP loan program. The companies that have done so have typically misreported their ownership, made false claims in applications, have hidden their corporate structure, and purposely miscounted the number of people they employ. These illegal actions directly take money away from the small businesses that need them.
A warning from the Secretary of the Treasury
The Secretary of the United States Treasury, Steven Mnuchin, issued a stern warning to businesses that applied for PPP loans from the SBA that shouldn’t have received the money. “The purpose of this program was not social welfare for big business,” he said. “The purpose of this program was to help small businesses.”
Mnuchin went on to say that the Treasury is going to conduct a “full review” of any loan totaling $2 million or more before those loans are forgiven. Mnuchin also said that any company that falsely certified they needed the PPP loan in order to continue operating will face criminal liability.
Whistleblowers are a protected class
The federal government provides protection to employees who blow the whistle on companies committing fraud, including companies that falsify information to receive PPP loans. The False Claims Act makes it illegal for businesses to fraudulently apply for PPP loans through the SBA.
If you decide to blow the whistle on your employer and are retaliated against, your workplace may be breaking the law and you deserve compensation. This can include giving you back your job and possibly reimbursing you for attorney’s fees, double back-pay, and emotional distress.
Do you suspect that your Phoenix employer lied to the SBA to acquire a PPP loan during the COVID-19 pandemic? It’s important that you not only blow the whistle on their unethical practices, but also protect yourself in doing so. Call the office of Plattner Verderame, P.C. at 602-266-2002, or complete our contact form to schedule a consultation today. We have offices in Phoenix and Tempe to better serve our clients.