Company accused of receiving multiple PPP loans settles lawsuit

ARLINGTON, VA – An Arlington business agreed in federal court on Friday to pay approximately $31,000 in damages and civil penalties to settle allegations that it violated the False Claims Act and obtained more than one Paycheck Protection Program loan in 2020, according to court documents.

J. Bryan Quesenberry had filed a lawsuit against Zen Solutions Inc., which provides staffing services, under the whistleblower provision of the False Claims Act. This provision allows individuals to sue on behalf of the federal government. As part of the settlement, Quesenberry will receive a portion of the recoupment.

The Quesenberry lawsuit alleged that Zen Solutions had received more than one PPP loan in 2020. In the settlement, the company agreed to repay the loan in full to its lender. As federal security for the predatory loan, the US Small Business Administration was liable to the lender for approximately $192,000. The settlement removes liability from SBA.

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“PPP funds have been set aside by Congress to assist Americans in desperate need as a result of the global pandemic,” Jessica D. Aber, U.S. Attorney for the Eastern District of Virginia, said in a statement. “Misuse of these funds prevents them from going to those who really need them and wastes public funds at the expense of American taxpayers. Therefore, prosecuting PPP loan fraud is a top priority for our office.”

Congress established the PPP Loan Program under the Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020 to provide emergency financial support to millions of Americans facing the economic effects of the pandemic.

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