Four Non-Profits, False Claims Act Violations, Washington DC 2023

Four non-profit organizations in Washington DC have agreed to pay over $3 million to resolve allegations that they violated the False Claims Act by applying for and receiving loans under the Paycheck Protection Program (PPP) despite being ineligible.

The United States Attorney’s Office for the District of Columbia announced the settlements with the non-profits, which include the League of United Latin American Citizens (LULAC), the National Bureau of Asian Research (Bureau), the National Conference on Public Employee Retirement Systems (NCPERS), and Prosperity Now.

LULAC, a Section 501(c)(4) non-profit organization, applied for and received two PPP loans totaling $164,354. The organization has agreed to pay $312,272.60 to resolve allegations that it violated the False Claims Act by obtaining the loans for which it was not eligible.

The Bureau, a Section 501(c)(3) non-profit organization, applied for and received a PPP loan in the amount of $411,111. The organization agreed to pay $475,000, plus interest, to resolve allegations that it violated the False Claims Act by obtaining the loan for which it was not eligible.

NCPERS, a Section 501(c)(4) non-profit trade association, applied for and received two PPP loans totaling $261,464. The organization has agreed to pay $457,562 to resolve allegations that it violated the False Claims Act by obtaining the loans for which it was not eligible.

Prosperity Now, a Section 501(c)(3) non-profit organization, applied for and received a PPP loan in the amount of $1,532,800. The organization agreed to pay $2,081,523.15, plus interest, to resolve allegations that it violated the False Claims Act by obtaining the loan for which it was not eligible.

The PPP was created by the Coronavirus Aid, Relief, and Economic Security (CARES) Act to provide emergency financial support to Americans suffering economic hardship due to the COVID-19 pandemic. However, the Act contained important limitations on loan eligibility, including restrictions on non-profit organizations.

An investigation by the United States Attorney’s Office found that the four non-profits were allegedly not eligible for the PPP loans based on the statutes and regulations governing the loan program.

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