The International Brotherhood of Electrical Workers Local 103, a Dorchester-based union and nonprofit organization, has agreed to pay over $2 million to settle allegations related to the Paycheck Protection Program (PPP) loan process. The settlement resolves claims that the union violated the False Claims Act by obtaining a PPP loan before it was eligible.
According to details released by authorities, IBEW Local 103 admitted that in April 2020 it applied for and received a first-round PPP loan before unions were eligible. Congress later amended the program in March 2021 to allow unions such as IBEW Local 103 to apply for loans. Following this change, the union applied for and received a second PPP loan. On its application for this second loan, the union certified eligibility under then-current regulations and affirmed that it had used all proceeds from its previous loan prior to applying again. Authorities stated that if IBEW Local 103 had waited until it became eligible in March 2021 for the first round of funding, it would not have spent those funds before seeking additional support.
The Paycheck Protection Program was created through the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which Congress enacted on March 29, 2020. The program aimed to provide financial relief during the COVID-19 pandemic by offering forgivable loans to small businesses meeting specific requirements. Administration of these loans occurred in two rounds: one starting in April 2020 and another in February 2021. Nonprofit organizations like IBEW Local 103 were only made eligible after amendments in March 2021. Eligibility for a second PPP loan required an entity to have already received—and exhausted—a first-round loan.
Authorities credited IBEW Local 103 with cooperation under Department of Justice guidelines regarding voluntary disclosure and remediation efforts related to False Claims Act matters.
United States Attorney Leah B. Foley commented on today’s announcement: “United States Attorney Leah B. Foley and the U.S. Small Business Administration made the announcement today.” Assistant U.S. Attorney Brian M. LaMacchia handled the case as Chief of the Affirmative Civil Enforcement Unit.
