BOSTON – Bankrupt lender Kabbage, Inc. d/b/a KServicing is facing up to $120 million in fines after allegations it defrauded the U.S. Small Business Administration’s (SBA) Paycheck Protection Program (PPP), violating the False Claims Act.
Kabbage filed for Chapter 11 bankruptcy in October 2022, winding down its operations as KServicing Wind Down Corp. The resolution includes two separate settlements with KServicing Wind Down Corp., totaling up to $120 million for recovery of general unsecured claims.
Acting United States Attorney Joshua S. Levy accused Kabbage of using PPP funds to maximize profits by submitting false claims for loan forgiveness and processing fees, despite receiving tens of millions through the program. Levy emphasized the office’s commitment to pursuing companies that exploited the pandemic relief program.
Principal Deputy Assistant Attorney General Brian M. Boynton highlighted the department’s dedication to accountability, noting that lenders who contributed to fund misuse would be held responsible. United States Attorney Damien M. Diggs echoed these sentiments, emphasizing the need for accountability among PPP lenders who ignored fraud signs.
SBA General Counsel Therese R. Meers and SBA OIG’s Assistant Inspector General for Investigations Shafee Carnegie emphasized the importance of preserving program integrity and holding accountable entities that misused taxpayer funds. Special Agent in Charge Jodi Cohen of the FBI Boston Division vowed to hold those who defrauded the government accountable.
Related Federal Cases
- Massachusetts Woman Pleads Guilty to Bank Fraud Scheme · Massachusetts
- Harvard-Trained FinServ Founder Faces Multi-Million Dollar Fraud Charges · Massachusetts
- Cambridge Man Jailed for $40K Diary Fraud · Massachusetts
- Ricco Gets Probation for EPA Fraud · Massachusetts
- Andover Man Pleads Guilty to Union Benefit Fraud · Massachusetts
Key Facts
- State: Massachusetts
- Agency: DOJ USAO
- Category: Fraud & Financial Crimes
- Source: Official Source ↗
🔒 Get the grimiest stories delivered weekly. Subscribe free →
Browse More
