What’s the Maximum Award for Blowing the Whistle on PPP Loan Fraud?

June 3, 2022

As a PPP Loan Fraud whistleblower law firm filing lawsuits under the False Claims Act (“FCA”) to help taxpayers recover funds obtained through PPP loan fraud, we’re often asked:  What’s the maximum award a PPP loan fraud whistleblower can receive?  We’ll answer that question, but first some quick disclaimers: no recovery is ever guaranteed, past results don’t guarantee future successes, and this is just hypothetical math for potential whistleblower recoveries.  The facts of your particular case will impact its value, which is why it’s always best to take advantage of a free, confidential consultation with an experienced whistleblower law firm like Brown, LLC.  

Okay, with that said:

In an illustrative scenario, if a company fraudulently obtained the largest possible Paycheck Protection Program (“PPP”) loan of $10 million, a whistleblower (or “relator”) could theoretically receive up to $9 million. 

Let’s work it out: if the government declined to intervene in the case, and the whistleblower was able to obtain a settlement for the government including the triple damages available under the FCA”, the government’s total recovery would be $30 million.  The whistleblower’s maximum possible award of 30% would then be $9 million.  A relator’s award of 30% is not common, but even the lowest possible award (15%, if the government did intervene) would still result in a sizable $4.5 million to the whistleblower recovery.

And one can imagine scenarios in which the whistleblower’s award could be even greater than $9 million.  First, a company scamming the government for PPP money  may have committed other fraud as well for which a relator could also recover.  Second, if the whistleblower was demoted or fired in retaliation for making complaints about the wrongful conduct, they may be entitled to additional damages for that retaliation.

Further, even though the rules say that $10 million was the maximum PPP loan an entity could receive, scammers don’t play by the rules.  As a firm with a mission to protect whistleblowers, we’ve seen fraudsters who illegally took out multiple PPP loans using other companies under the same ownership and management, and thereby busting through the $10 million cap.  So for argument’s sake, let’s say an unscrupulous company disguised its relationships with other companies in order to aggregate $15 million in loans.  They would then potentially be liable for a total of $45 million, and a whistleblower who got a 30% award would end up with a little over $13 million for doing the right thing.

But don’t get blinded by dollar signs.  Although these big numbers are theoretically possible, the government usually doesn’t seek full triple damages.  A 30% share is available only in non-intervened cases. Because the government will probably intervene in cases with blatant fraud and big bucks, the relator’s share for such cases is likely limited to no more than 25%.

In addition to undisclosed interrelated companies, here are some other types of PPP loan fraud:

  • • Creating fictious businesses
  • • Inflating employee head counts
  • • Falsifying and inflating payroll numbers
  • • Improper allocations of PPP money
  • • Furloughing, laying off, or firing employees

Companies and individuals have committed an amazing amount of PPP loan fraud, through an amazing variety of scams.  If you see something, say something by contacting the PPP loan fraud fighters at the law firm of Brown, LLC.  Call (877) 561-0000 for a free, confidential consultation.

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