First-Ever Paycheck Protection Program False Claims Act Whistleblower Case in which US Intervened Against Borrower Settles | USAO-SDFL

MIAMI – Pan African Interchange LLC and Stanley Damas have agreed to pay $21,583.31 to resolve False Claims Act allegations stemming from their false certifications that Pan African Interchange LLC would not receive more than one loan from the Protection Program paychecks (PPP) by December 31, 2020, U.S. Attorney Juan Antonio Gonzalez announced.

The CARES (Coronavirus Aid, Relief and Economic Security) Act authorized PPP loans to qualifying small businesses that are struggling to pay employees and other business expenses during the pandemic. Under the PPP, in 2020 eligible businesses could obtain an SBA-backed PPP loan. Businesses were required to spend loan proceeds on employee compensation, rent or mortgage, and other specified expenses and, depending on their use of the loan proceeds, were eligible for loan forgiveness up to of the total amount of the loan if certain conditions were met.

The SBA has delegated authority to third-party lenders to underwrite and approve PPP loans. To obtain a PPP loan, an eligible business (through its authorized representative) signs and submits a PPP loan application online through the lender’s application platform. The PPP loan application required the business (through its authorized representative) to acknowledge the rules of the PPP program and make certain affirmative certifications in order to qualify for the loan. Borrowers were required to certify true and accurate that the applicant had not received and would not receive more than one loan under the PPP by December 31, 2020. A similar certification was required if a borrower requested loan forgiveness .

On April 14, 2022, the United States intervened and on May 20, 2022 filed its Intervention Complaint against Pan African Interchange LLC and its owner, Stanley Damas, in a whistleblower case filed against Pan African Interchange LLC in accordance with the who tam provisions of the law on misrepresentation. This case is the first PPP False Claims Act whistleblower case in which the United States has intervened. The United States alleged that after requesting a PPP loan on May 20, 2020, Pan African Interchange LLC, through Stanley Damas, requested a second PPP loan on May 21, 2020 and received a PPP loan on May 22 May 2020 of its first request, falsely certified that Pan African Interchange had not and would not receive more than one loan before December 31, 2020, when on June 12, 2020, Pan African Interchange, LLC signed a promissory note for a second PPP loan which it received on June 24, 2020. The United States further charged in its complaint in intervention that, despite numerous requests and in violation of PPP rules and the FCA, Pan African Interchange LLC and Damascus illegally refused to return the second PPP loan.

After the United States filed and served its complaint in intervention, Damascus and Pan African Interchange LLC repaid the United States $208,332.00 to satisfy the second Pan African Interchange PPP loan. However, in the settlement announced today, Pan African Interchange LLC and Damascus agreed to pay an additional $21,583.31.

The claims resolved by the settlement are allegations only and no liability has been determined.

Assistant U.S. Attorney James A. Weinkle handled the case, and Justice Department Civil Division Trial Attorney Jared Wiesner and the SBA’s Office of Litigation assisted.

The qui tam action in the United States District Court for the Southern District of Florida captioned United States of America ex rel. Bryan Quesenberry v. Pan African Interchange, LLC, et al., Case No. 9:20-cv-81717-DMM (SD Fla).

Related court documents and information may be viewed on the District Court for the Southern District of Florida website at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov .

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