Labor Unions to Pay $5.1 Million to Resolve False Claims Allegations Over PPP Loans

Four labor organizations have agreed to pay a combined $5.1 million to settle allegations that they improperly obtained loans under the Paycheck Protection Program (PPP). The United States alleged the organizations applied for and received PPP loans despite being ineligible, resulting in the government paying out not only the loan amounts but also interest and processing fees to financial institutions.

The PPP, established through the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2020, was intended to provide forgivable loans to small businesses struggling with the economic impact of the COVID-19 pandemic. Applicants were required to certify their eligibility and agree to program rules. However, the organizations in question allegedly submitted false certifications and benefited from loan forgiveness despite not meeting eligibility requirements at the time.

The labor organizations and settlement amounts are as follows: Local Union No. 3 of the International Brotherhood of Electrical Workers (IBEW Local 3) in Flushing, New York, agreed to pay $2,697,929.88; International Brotherhood of Electrical Workers Local Union 596 (IBEW Local 596) in Clarksburg, West Virginia, will pay $269,995.83; United Association of Journeymen 598 (UA Local 598) in Pasco, Washington, agreed to $835,508.00; and International Brotherhood of Teamsters Local 986 (Teamsters Local 986) in Covina, California, settled for $1,356,832.50.

Acting United States Attorney Randolph J. Bernard stated that organizations who took advantage of the PPP undermined the relief effort intended for businesses genuinely affected by the pandemic. The case was handled by Assistant United States Attorneys Maximillian F. Nogay and Jordan V. Palmer from the Northern District of West Virginia.

Article by multiple RFHC contributors, based upon information from the U.S. Attorney’s Office, Northern District of West Virginia

---