Two Orlando resort companies have agreed to pay back $325,000 for providing false information on their application for COVID-19 relief aid forgiveness, following a settlement with the U.S. Department of Justice, as a result of a whistleblower’s lawsuit.
2 Orlando Resort Companies
The resorts, Kingwood Orlando Reunion Resort LLC and Kingwood Crystal River Resort Corp., were found to have conspired to defraud the federal government and pocketed the money they received from the Paycheck Protection Program (PPP) loans.
Crystal River falsely claimed it had used a portion of its PPP loan to pay 22 of its employees who had supposedly earned $4,224. However, these employees actually worked for Orlando Reunion, according to a published article in Yahoo News.
The two resorts, which are related but operate separately, have until early May to pay $271,720 in damages and penalties and another $53,280 in civil penalties. The whistleblower who filed the lawsuit will receive $46,000 in connection with the settlement.
PPP Loans for Small Businesses
PPP was created in March 2020 under the larger CARES Act to help small businesses survive the COVID-19 pandemic. However, to receive forgiveness for loans, businesses had to certify that the money was used on eligible expenses, like payroll.
In a published article in Our Community Now, the U.S. Attorney for the Middle District of Florida, Roger Handberg, said that protecting government programs from fraud is a primary mission of his office and that violators will be held accountable.
Amaleka McCall-Brathwaite, the lead agent on the case for the Small Business Administration Office of the Inspector General, said that the settlement demonstrates that attempts to wrongfully obtain loan forgiveness will not go unnoticed, and violators will be identified.
The case shows that the government is taking PPP fraud seriously and that businesses must use the money for eligible expenses only. It also highlights the importance of whistleblowers in uncovering fraudulent activity and holding those responsible accountable.