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Press Release

Non-Profit Middle East Institute to Pay $718,558 to Resolve PPP Fraud Allegations

For Immediate Release
U.S. Attorney's Office, District of Columbia

            WASHINGTON –The Middle East Institute, a Washington, D.C., based nonprofit organization, has agreed to pay $718,558 to settle allegations that the organization violated the False Claims Act when it applied for and received a $359,279 second-draw loan under the Paycheck Protection Act Program of the CARES Disaster Relief Program, and when it further applied for and was granted forgiveness of the entire amount of the loan. 

            The agreement was announced today by U.S. Attorney Matthew M. Graves for the District of Columbia and Special Agent in Charge Amaleka McCall-Brathwaite of the U.S. Small Business Administration, Office of the Inspector General, Eastern Region.

            In March 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was created to provide emergency financial support to Americans suffering economic hardship due to the COVID-19 pandemic. The CARES Act authorized billions of dollars in forgivable loans to small business and other entities, including non-profit organizations, struggling to pay employees and other business expenses. Under the applicable provision of the CARES Act, a business concern or other entity, including a nonprofit organization, is not eligible to receive a second draw loan if it is primarily engaged in political or lobbying activities, which shall include any entity that is organized for research or for engaging in advocacy in areas such as public policy or political strategy or otherwise describes itself as a think tank in any public document.

            At the time it applied for the second draw PPP loan, the Middle East Institute certified to the SBA in the loan application that it was “not a business concern or entity primarily engaged in political or lobbying activities, including any entity that is organized for research or for engaging in advocacy in areas such as public policy or political strategy or otherwise describes itself as a think tank in any public documents.”  It further certified in the loan forgiveness application that it met the conditions for receiving the second draw PPP loan. The Middle East Institute contends that any misstatements in this application were inadvertent.

            Under the False Claims Act, a party found to violate the Act must pay three-times the amount of damage to the United States. Had the Middle East Institute been found liable to the United States under the False Claims Act, it would have been ordered to pay three times the amount of the loan and lost interest, along with civil penalties for each certification made in the loan application and forgiveness application. In connection with this settlement, the Middle East Institute agreed to pay an amount equal to two-times the loan amount, or $718,558.

            The settlement announced today stems from a Federal investigation that was initiated when another public interest group, TZAC, filed a whistleblower complaint pursuant to the qui tam provisions of the False Claims Act. The claims resolved by the civil settlement are allegations only. There has been no determination of liability in the civil case.

            The civil settlement was the result of an investigation by Assistant U.S. Attorney Darrell Valdez and Auditor Timothy Hurley of the U.S. Attorney’s Office for the District of Columbia.  U.S. Attorney Graves commended Attorneys Gary Fox and Kandace Zeyala of the U.S. Small Business Administration Office of the General Counsel for their assistance in the investigation and settlement negotiations. The case is captioned U.S. ex rel. TZAC v. The Middle East Institute.

            Tips and complaint regarding potential fraud affecting COVID-19 government relief programs can be reported by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at (866) 720-5721 or by submitting a NCDF Web Complaint form at


Updated June 18, 2024

Financial Fraud
Press Release Number: 24-524