Non-profit entity settles False Claims Act allegations involving Paycheck Protection Loan

ALEXANDRIA, Va. – Lake Ridge Parks and Recreation Association, Inc. of Woodbridge paid $695,000 to settle False Claims Act allegations that it certified that it was eligible to receive a Paycheck Protection Program (PPP) loan for which it was not eligible.

The PPP offered loans to eligible small businesses for economic relief during the COVID-19 pandemic. PPP borrowers were required to provide their income and supporting documents to qualify for the loan amount and for later loan forgiveness.

The United States alleged that Lake Ridge is a 501(c)(4) tax exempt entity and that such organizations were not eligible to receive funding through the PPP. The United States also alleged that Lake Ridge applied for a PPP loan and certified on its application that it was eligible to receive a loan under the rules in effect at the time the application was submitted.

The settlement began with a lawsuit, United States ex rel. Wade Riner v Lake Ridge Parks and Recreation Association, Inc., that was 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 whistleblower will receive a 10-percent share of the settlement.

This resolution was the result of a coordinated effort between the U.S. Attorney's Office for the Eastern District of Virginia and the Small Business Administration.

The matter was investigated by former Assistant U.S. Attorney Gina H. Kim.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Case records may be found on PACER under case number 1:24-cv-971.

The civil claims settled are allegations only; there has been no determination of civil liability.