Miles Partnership, LLC (Miles), a travel and tourism consulting company headquartered in Sarasota, Florida, has agreed to a civil settlement of $2,281,950 to resolve allegations that Miles improperly obtained and received forgiveness of a loan under the Paycheck Protection Program (PPP).
Congress created the PPP in March 2020 as part of the Coronavirus Aid, Relief and Economic Security (CARES) Act to provide emergency loans to small businesses suffering economic hardship due to the COVID-19 pandemic. The CARES Act authorised these businesses to seek forgiveness of the loans if they spent the loan funds on eligible expenses.
When applying for PPP loans, borrowers were required to certify the truthfulness and accuracy of all information provided in their loan applications. The PPP was administered by the U.S. Small Business Administration (SBA). Under the PPP rules and regulations then in effect, companies that were required to file a registration statement under the Foreign Agents Registration Act (FARA) were not eligible for a PPP loan.
GNGH2, Inc. filed a qui tam complaint in the Middle District of Florida alleging that Miles improperly obtained a second draw PPP loan for $2 million. According to the allegations in the complaint, Miles was required to file a registration statement under FARA due to its work with various foreign tourism boards. The United States investigated GNGH2’s allegations with Miles’s cooperation. The civil settlement will conclude the lawsuit filed by GNGH2 and GNGH2 will receive $207,450 as a share in the recovery.
“The United States Attorney’s Office is committed to investigating and holding responsible those applicants who improperly obtained loans under the PPP program,” said U.S. Attorney Roger B. Handberg for the Middle District of Florida. “We will continue to seek civil redress and, where appropriate, criminally prosecute those individuals and entities that obtained PPP loans to which they were not entitled.”
SBA’s General Counsel Therese Meers stated, “The favourable settlement in this case is the product of enhanced efforts by federal agencies such as the Small Business Administration working with the U.S. Attorney’s Office, other federal law enforcement agencies, as well as private individuals who uncover borrower misconduct to recover the lending program’s damages as well as penalties.”
The investigation was handled by Assistant U.S. Attorney Christopher J. Emden, with assistance from the Small Business Administration – Office of General Counsel.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across the government to enhance efforts to combat and prevent pandemic-related fraud.
The task force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts.
The claims resolved by the settlement are allegations only and there has been no determination of liability.
