A civil settlement has been unsealed, showing that a group of IT companies agreed to pay $7 million after receiving funding from the CARES Act Paycheck Protection Programme, for which they were ineligible.
In 2020, Congress enacted the Coronavirus Aid, Relief, and Economic Security Act, commonly known as the ‘CARES Act’.
Qualifying businesses were authorised to obtain a forgivable disaster loan to preserve jobs in industries impacted by COVID-19.
When the CARES Act was amended, applicants were allowed to seek a second round of disaster relief funding, with eligibility limited to small businesses with 300 or fewer employees.
Under the Federal False Claims Act, private individuals act as qui tam, “whistleblowers”, and may bring lawsuits against entities that have committed fraud against the government.
A qui tam civil complaint was filed by GNGH2, Inc. in December 2024, alleging that Speridian Technologies LLC, BenefitAlign, LLC, Xelleration LLC, TrueCoverage LLC, Business Advantage Consulting Inc., and Helix Business Solutions LLC (Speridian Group) violated the False Claims Act.
The principal locations for the businesses are Washington, New Mexico, California, and Tennessee. Court documents show that the Speridian Group allegedly employed more than 300 people and provides various IT and internet-based services globally.
The Speridian Group companies each sought a second round of Paycheck Protection Programme (PPP) loans under the CARES Act in 2021 and 2022.
Collectively, the companies within Speridian Group received $4,896,758.73 in loans processed by BOK Financial, located in Tulsa, Oklahoma. After receiving the funds, they applied for and received forgiveness for each loan.
In the settlement agreement, the Speridian Group admitted that it was a member of a single corporate group for purposes of determining PPP loan eligibility and that it exceeded the 300-employee threshold.
As a result, they received a second PPP loan that was forgiven, even though they were not eligible.
To resolve the civil claims against it, the Speridian Group agreed to pay the United States $7,000,000, of which $5,101,881.63 is restitution.
After the restitution is paid to the Small Business Administration, the United States will pay GNGH2, Inc. $700,000 as its statutory share under the False Claims Act for bringing the suit.