The Energy Federation, Inc. (EFI), a nonprofit based in Franklin, Massachusetts, has agreed to pay $1 million to settle allegations that it improperly obtained a Paycheck Protection Program (PPP) loan during the COVID-19 pandemic.
The PPP was established by Congress to help small businesses cope with economic hardships caused by the pandemic. The Small Business Administration (SBA) administered the program in two rounds, starting in April 2020 and again in February 2021. While some nonprofit organizations were eligible for PPP loans, those classified as 501(c)(4) organizations, such as EFI, were not permitted to participate.
According to federal authorities, EFI discussed its eligibility with its bank before submitting a PPP loan application but did not disclose its status as a 501(c)(4) organization to the SBA. The organization certified on its application that it was eligible for the loan under existing rules at the time of submission. After receiving the loan, EFI also applied for and received forgiveness based on these certifications.
The case originated from a lawsuit filed by a whistleblower under the qui tam provisions of the False Claims Act. These provisions allow private individuals to sue on behalf of the government and receive a portion of any recovered funds. As part of this settlement, the whistleblower will receive 10 percent of the recovery.
“United States Attorney Leah B. Foley and the U.S. Small Business Administration made the announcement today. Assistant U.S. Attorney Julien M. Mundele of the Affirmative Civil Enforcement Unit handled the matter.”
