The United States Attorney’s Office for the District of North Dakota announced a settlement with Education for Just Peace in the Middle East, also known as US Campaign for Palestinian Rights (EfJP), regarding its participation in the Paycheck Protection Program (PPP) under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). EfJP agreed to pay $353,000 to resolve allegations related to PPP loan eligibility.
The CARES Act was enacted in March 2020 to provide financial relief during the COVID-19 pandemic. It included provisions for forgivable loans to small businesses and some non-profits through the PPP. EfJP applied for and received First Draw and Second Draw PPP loans totaling $308,905.28, which were later forgiven.
According to federal regulations at the time, organizations primarily engaged in political or lobbying activities were not eligible for these loans. The rules required applicants to certify their eligibility based on their primary activities.
A whistleblower lawsuit filed by TZAC, Inc., a New York-based non-profit, alleged that EfJP was not eligible for a Second Draw loan due to its activities. The resulting investigation led to a settlement agreement requiring EfJP to reimburse SBA for all principal, interest, and lender processing fees associated with both loans; pay TZAC its share under the False Claims Act; and cover certain expenses from resolving the case. The civil claims settled are allegations only; there has been no determination of liability and EfJP denies any wrongdoing.
U.S. Attorney Nicholas W. Chase acknowledged those involved in investigating and settling the matter. “Investigations like this one reflect collaboration of the Small Business Administration, including SBA’s Office of General Counsel and Office of Inspector General, and the U.S. Attorney’s Office. When whistleblowers uncover potentially fraudulent conduct, we work to recover SBA funds improperly obtained,” said SBA General Counsel Wendell Davis.
The case is titled United States of America ex rel. TZAC, Inc. v. Education for Just Peace in Middle East a/k/a United States Campaign for Palestinian Rights in U.S. District Court for North Dakota (Case No. 1:22-cv-00137-DLH-CRH).
Further information about COVID-19-related fraud enforcement can be found at https://www.justice.gov/coronavirus.
Anyone with information about suspected COVID-19 fraud may report it by calling 866-720-5721 or submitting details online at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
