SACRAMENTO, CA – Political Solutions, LLC, a California lobbying firm, is shelling out $556,924 to the United States government after admitting to a brazen scheme to illegally obtain funds from the Paycheck Protection Program (PPP). The settlement, announced by Acting U.S. Attorney Kimberly A. Sanchez, resolves allegations the firm knowingly lied to secure a loan they weren’t entitled to.
The PPP, launched in March 2020 as part of the Coronavirus Aid, Relief, and Economic Security Act, was intended as a lifeline for legitimate small businesses drowning in the economic fallout of the COVID-19 pandemic. But as Grimy Times has repeatedly exposed, the program became a magnet for fraud, with countless entities attempting to exploit the crisis for personal gain. Political Solutions, it appears, was among them. Firms primarily engaged in political activities – like lobbying – were explicitly excluded from eligibility.
Despite this clear restriction, Political Solutions applied for and received a $216,000 PPP loan in April 2020. They then attempted to have that loan forgiven by the U.S. Small Business Administration (SBA) in January 2021, effectively doubling down on the deception. The government alleges the firm knowingly falsified eligibility certifications, a direct violation of the False Claims Act (FCA) and the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA).
Under the terms of the settlement, Political Solutions will pay $456,924 in damages under the FCA and a hefty $100,000 in civil penalties under FIRREA. “The Paycheck Protection Program was a vital resource for struggling small businesses during the COVID-19 pandemic,” said Acting U.S. Attorney Sanchez, in a statement that thinly veiled her office’s continued scrutiny of PPP abuse. “This Office will continue to investigate businesses who took advantage of these funds at the expense of the public.”
SBA General Counsel Wendell Davis echoed that sentiment, framing the settlement as a win for federal agencies working together to recover stolen pandemic relief funds. “The favorable settlement in this case is the product of enhanced efforts…to pursue a fair recovery of pandemic relief funds,” Davis stated. The case was handled by Assistant U.S. Attorney Robert A. Fuentes. It’s a small victory, perhaps, but a clear signal that even those with political connections aren’t immune to prosecution when they attempt to fleece the system.
It’s important to note that this settlement resolves allegations only, and there has been no formal determination of liability. However, the substantial financial penalty speaks volumes about the strength of the government’s case and the brazen nature of the alleged fraud. Grimy Times will continue to track this case and report on any further developments.
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Key Facts
- State: California
- Agency: DOJ USAO
- Category: White Collar Crime
- Source: Official Source ↗
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