Northern Virginia Company Settles False Claims Act Allegations of Improper Paycheck Protection Program Loan — Justice Department Office of Public Affairs
Summary
Zen Solutions Inc., a Virginia-based staffing company, agreed to pay approximately $31,000 in damages and civil penalties to settle False Claims Act allegations that it obtained more than one Paycheck Protection Program (PPP) loan in 2020, the Justice Department announced on February 11, 2022. PPP applicants had to certify that they would not receive more than one PPP loan prior to Dec. 31, 2020. Zen Solutions also agreed to repay the duplicative loan in full to its lender, relieving the SBA of liability for the federal guaranty of approximately $192,000. The settlement resolves a whistleblower lawsuit filed by J. Bryan Quesenberry, who will receive a share of the recovery. The claims are allegations only, with no determination of liability.
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Press Release Northern Virginia Company Settles False Claims Act Allegations of Improper Paycheck Protection Program Loan Friday, February 11, 2022 For Immediate Release Office of Public Affairs Zen Solutions Inc., a Virginia-based company, has agreed to pay approximately $31,000 in damages and civil penalties to settle allegations that it violated the False Claims Act by obtaining more than one Paycheck Protection Program (PPP) loan in 2020. Zen Solutions also agreed to repay the duplicative PPP loan in full to its lender, relieving the U.S. Small Business Administration (SBA) of liability to the lender for the federal guaranty of approximately $192,000 on the improper loan. “PPP loans were intended to provide critical relief to small businesses so that they could pay employees and maintain operations,” said Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division. “The department is committed to pursuing those who knowingly violated the requirements of the PPP or other COVID-19 assistance programs and obtained relief funds to which they were not entitled.” “PPP funds were set aside by Congress to aid Americans in desperate need as a result of the global pandemic,” said U.S. Attorney Jessica D. Aber for the Eastern District of Virginia. “Abusing these funds prevents them from going to those truly in need and wastes public funding at the expense of the American taxpayers. As a result, pursuing PPP loan fraud is a high priority for our office.” “The continual commitment of the Office of Inspector General (OIG) is to shield SBA funds intended to support the nation’s robust small business community,” said Special Agent in Charge Amaleka McCall-Brathwaite of SBA OIG. “OIG remains committed to rooting out bad actors and protecting the integrity of SBA programs. I want to thank the U.S. Department of Justice and our law enforcement partners for their dedication and pursuit of justice.” Congress created the PPP in March 2020, as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, to provide emergency financial support to the millions of Americans suffering the economic effects caused by the COVID-19 pandemic. The CARES Act authorized billions of dollars in forgivable loans to small businesses struggling to pay employees and other business expenses. Throughout 2020, PPP loan applicants were required to certify that they would not receive more than one PPP loan prior to Dec. 31, 2020. This settlement resolves allegations that Zen Solutions applied for and received a second, duplicative PPP loan in 2020. Zen Solutions provides staffing services in the fields of information technology, data analytics, cyber security and litigation support. The settlement with Zen Solutions resolved a lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery. The civil lawsuit was filed by J. Bryan Quesenberry. As part of this resolution, he will receive a share of the recovery. The resolution obtained in this matter was the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the Eastern District of Virginia, with assistance from the SBA’s Office of General Counsel and Office of the Inspector General. This matter was handled by Trial Attorney Jared S. Wiesner of the Civil Division and Assistant U.S. Attorneys Kristin Starr and William Hochul of the Eastern District of Virginia. On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The task force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus . Tips and complaints from all sources about potential fraud affecting COVID-19 government relief programs can be reported by visiting the webpage of the Civil Division’s Fraud Section, which can be found here . Anyone with information about allegations of attempted fraud involving COVID-19 can also report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form . The claims resolved by the settlement are allegations only, and there has been no determination of liability. Updated February 11, 2022 Attachment Zen Solutions settlement agreement.pdf [PDF, ] Topics Coronavirus False Claims Act Components Civil Division USAO - Virginia, Eastern Press Release Number: 22-119 Related Content Press Release California Food Distributor Settles False Claims Act Liability Relating to Self-Disclosure of Small Business Contracting Violations GS Foods Group Inc. (GS Foods), headquartered in Ontario, California, has agreed to pay $949,696.90 to resolve False Claims Act liability in connection with bidding on contracts reserved for small... January 29, 2025 Press Release BioReference Health and OPKO Health Agree to Pay $704,349 to Settle Allegations that they Billed the Government for Medically Unnecessary Blood Tests BioReference Health LLC, formerly known as BioReference Laboratories Inc. (BioReference) and OPKO Health Inc. (OPKO), have agreed to pay $704,349 to resolve alleged violations of the False Claims Act arising... 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