Michigan nonprofits agree to pay $225,887 for obtaining loans under Paycheck Protection Program
(CBS DETROIT) - Two nonprofit organizations in Michigan have agreed to settle allegations that the organizations improperly received loans under the Paycheck Protection Program (PPP).
The Michigan Education Association (MEA) and the Michigan Education Special Services Association (MESSA) are accused of violating the False Claims Act by applying for and obtaining these loans for which they knew or should have known they did not qualify, according to the U.S. Department of Justice.
The Paycheck Protection Program was created in March 2020 as part of the CARES Act to help support millions of Americans through economic struggles caused by the COVID-19 pandemic.
MEA, a 501(c)(5) nonprofit labor union organization, and MESSA, a 501(c)(9) voluntary employees' beneficiary association, both obtained PPP loans in 2020.
The U.S. Department of Justice says the organizations knew or should have known they could not receive these loans. In addition, the Small Business Association had to pay lender fees to the bank that processed these loans.
Officials say MEA will pay $115,265, and MESSA will pay $110,622 to the United States to resolve these allegations.
"Those who violate the False Claims Act by fraudulently receiving SBA pandemic program funds meant for eligible small businesses will be held accountable," said Special Agent in Charge Sharon Johnson of SBA OIG's Central Region. "Today's settlements send a strong message that those responsible will be held accountable. I want to thank the Department of Justice and our law enforcement partners for their dedication and pursuit of justice."
The settlement resolved a lawsuit filed under the qui tam or whistleblower provision of the False Claims Act by the Mackinac Center for Public Policy.