Northern District U.S. Attorney Clay Joyner has announced that, in addition to ongoing criminal investigations and prosecutions, the U.S. Attorney’s Office for the Northern District of Mississippi is conducting a comprehensive civil investigation regarding potential fraud involving the Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act, that has resulted in over $20 million dollars in judgments to date. Specifically, the investigation is using the False Claims Act, 31 U.S.C. §§ 3729-3733 to target fraudulent loans obtained through the Paycheck Protection Program.
The Civil Division’s lawyers have obtained more than 150 False Claims Act judgments to date (more than any other district in the country) and obtained millions of dollars in those judgments. In addition to allowing the government to recover treble damages or triple the amount of the PPP loan, the False Claims Act also allows the United States to recover up to $27,018 in penalties for each PPP loan, bank processing fees, and a $402 court filing fee.
In addition to the civil judgments the office has obtained, investigations initiated by the Civil Division’s Affirmative Civil Enforcement Attorney, Harland Webster, have also uncovered fraud schemes that subsequently resulted in criminal prosecutions. One includes Chris Lick of Starkville, Mississippi, who was sentenced to 78 months for submitting a fraudulent PPP loan application and has a $12,000,000 civil judgment. Another example is Mississippi attorney and SBA employee LaKeith Faulkner, who was sentenced to 62 months and ordered to pay $10,600,000 in restitution for his role in a scheme to obtain fraudulent PPP loans.
In announcing the ongoing investigations, U.S. Attorney Joyner remarked, “We anticipate focusing on PPP fraud for several years to come and are proud to be recovering tax-payer money. We will not allow fraud schemes to remain unchecked in our district and we will use all civil and criminal remedies available to hold accountable those who committed fraud.”
Civil Chief John E. Gough, Jr. stated, “We are uncovering fraud throughout our district. This fraud scheme was rampant, and we would like the public’s help in recovering these ill-gotten funds. If you have a tip regarding potential fraud in our district, please contact us by sending an email to CovidFraudNDMS@usdoj.gov.”
The investigations into PPP fraud by the U.S. Attorney’s Office for the Northern District of Mississippi have been ongoing for approximately 12 months and have expanded to areas all across the District. Recent amendments to federal law have extended the statute of limitations for civil and criminal fraud enforcement actions involving PPP loans from six years to a period of up to ten years.
