With the second round of Paycheck Protection Program (“PPP”) loans resuming in January 2021, a new wave of investigations into potential fraud and abuse in the use of PPP proceeds has commenced.
This new wave comes on the heels of the U.S. Department of Justice (“DOJ”) entering into its first civil fraud settlement to date related to PPP loans. On January 12, 2021, the DOJ entered into a settlement agreement with California-based online retail company, SlideBelts Inc., which, without admitting to liability, accepted responsibility for having misrepresented its bankruptcy status when applying for PPP loans. This first civil settlement is a harbinger for more PPP related False Claims Act investigations under the Biden administration.
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