Many businesses were lucky enough to receive government aid and assistance in the past year. Often this was through the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which introduced significant federal spending to support and stabilize the economy, support states and municipalities, assist businesses, support industries, support healthcare systems and workers, educational programs, and more. Enacted in March of 2020, the rescue package involved $2.3 trillion in federal spending, including funding for Paycheck Protection Program (PPP) and Unemployment Insurance Program.
The potential for fraud was vast
As with any crisis and massive government spending, there is the potential for fraud, with dozens already caught, including two men recently pleading guilty to a $35 million scheme using PPP. When the fraud involves government spending, whistleblowers can report it through the False Claims Act. Fraudulent activities could involve:
- Businesses claimed to use the money they got for approved purposes when it was not.
- Businesses knowingly submitted false information on applications to get loans or assistance.
- Local governments used CARES Act funds for unapproved purposes.
- It could be such fraudulent schemes as kickbacks, price-fixing, price gouging, and anti-competitive actions.
- Violations using earmarked spending.
Employees are often a source for accountability
Business or government employees were often in the best position to recognize and then report fraudulent actions. Using the False Claims Act, whistleblowers are protected from retaliation and can receive compensation for reporting fraud. However, such claims are often complex, so whistleblowers often find it helpful to work with an attorney who understands how to handle these claims effectively and guide their clients through the process.