In the earlier days of the COVID-19 pandemic, the US government took many steps to protect small businesses, workers, and their families. The Paycheck Protection Program (PPP) was one of the most helpful lifelines for American families, providing forgivable loans to businesses with less than 500 employees that could prove they used the funds appropriately. While most of the PPP loans were distributed and used legitimately according to their intended purpose, there were also many cases of PPP fraud.
Now that the dust has settled, people across the country are coming forward to blow the whistle on PPP fraud. Read on to find out what whistleblowers need to know before taking action against their employers.
Whistleblowers Are Afforded Protections Under Federal Law
The first thing PPP whistleblowers need to know is that the law is on their side. The False Claims Act (FCA) prohibits employers from retaliating against whistleblowers, whether they are employees, independent contractors, or agents. Anyone who has experienced discriminatory acts after reporting PPP fraud should visit mjsbjustice.com to get legal help.
Despite the fact that federal law prohibits employers from harassing, threatening, demoting, suspending, or otherwise discriminating against whistleblowers, it’s best to hire a lawyer before filing a claim. Working with a fraud lawyer will help whistleblowers protect their rights and ensure that they can get the financial rewardsto which they are entitled.
Identifying PPP Fraud
Business owners committed fraud related to the PPP in various ways, but the most common of them were padding numbers to get bigger loans and using the funds for unauthorized purposes. People who provided false information on their CARES loan applications should be held accountable and blowing the whistle on fraud is the first step towards making sure that’s what happens.
To be eligible for loan forgiveness, at least 60% of the money disbursed to small business owners had to be spent on payroll expenses. However, there were also specific stipulations regarding how the remaining 40% could be spent. Business owners had to put the money towards one or more of the following:
- Utility bills
- Lease payments
- Mortgage interest
- Property damage
- Software and other operational necessities
- Supplier costs
Addressing COVID complaints
The loans were supposed to be disbursed only to small business owners and self-employed individuals who needed the money due to economic hardship caused by COVID-19. Those who received the funds were not supposed to be taking advantage of other Small Business Association (SBA) programs offering the same kinds of relief.
Who Are PPP Whistleblowers?
Most of the PPP whistleblowers who have filed qui tam lawsuits so far have been employees who happen to hold positions that make the discovery of fraud more likely. They include bookkeepers, accountants, and office managers. However, anyone who has observed instances of fraud can report it and may be eligible to receive a reward under the FCA.
Seek Legal Representation Before Filing a Claim
If there’s one thing that all PPP whistleblowers have in common, it’s that they are best off seeking legal representation before filing claims against perpetrators of fraud. A lawyer can explain the protections afforded to whistleblowers and help clients determine the best ways to move forward with their claims. Learn more about options for reporting PPP fraud by calling to schedule an appointment with an employment justice lawyer ASAP.