A private country club located in Sun City, Briarwood Country Club, has agreed to pay $631,400 to resolve allegations that it violated the False Claims Act by knowingly obtaining a loan under the Paycheck Protection Program (PPP) for which it was not eligible.
When Congress enacted the Coronavirus, Aid, Relief, and Economic Security (CARES) Act, it authorized forgivable PPP loans to eligible small businesses for job retention and certain other expenses. The PPP loan program was administered by the Small Business Administration (SBA). At the time of the loan covered by this settlement, certain entities organized under section 501(c) of the Internal Revenue Code were not eligible for PPP loans, including 501(c)(7) organizations.
In May 2020, Briarwood applied for a PPP loan in the amount of $431,800 and certified that it was eligible to receive the loan even though it was ineligible as a 501(c)(7) nonprofit organization. After receiving the PPP loan, Briarwood sought and received forgiveness of the loan. The United States contended that Briarwood knew or should have known it was ineligible to receive the PPP loan, and that it caused the SBA to pay lender fees to the bank that processed the loans. Briarwood will pay $631,400 to the United States to resolve these allegations.
The settlement resolves claims brought under the qui tam or whistleblower provisions of the False Claims Act. Under these provisions, a private party can file an action on behalf of the United States and receive a portion of the recovery. The qui tam complaint was filed by Relator Wade Riner and is captioned United States ex rel. Riner v. Recreation Centers of Sun City West, et al., No. 22-cv-01421 (D. Ariz.). Mr. Riner will receive a total share of approximately $63,400 in connection with the settlement.