Country Club To Pay Over $440,000 To Resolve Allegations It Received Paycheck Protection Program Loan As An Ineligible Nonprofit Organization

Resolution Builds on a Steady Stream of Civil and Criminal Cases to Protect Taxpayer Dollars Spent as Pandemic-Related Assistance

          GRAND RAPIDS – U.S. Attorney for the Western District of Michigan Mark Totten today announced that Gull Lake Country Club of Richland, Michigan, has agreed to pay $440,312.50 to resolve allegations in a civil case that it falsely obtained a Paycheck Protection Program (PPP) loan in 2020 when it was an ineligible nonprofit organization.

          “The Paycheck Protection Program provided important financial relief to eligible small businesses and other entities,” said U.S. Attorney Mark Totten. “Today’s resolution demonstrates our continued commitment to protect taxpayer dollars and investigate allegations of fraud on critical government programs.”

          SBA’s General Counsel Therese Meers stated, “The favorable settlement in this case is the product of enhanced efforts by federal agencies such as the Small Business Administration working with the U.S. Attorney’s Office, other federal law enforcement agencies, as well as private individuals who uncover fraudulent conduct to recover the product of this fraud as well as penalties.”

          When Congress enacted the Coronavirus, Aid, Relief, and Economic Security (CARES) Act, it authorized forgivable PPP loans to eligible small businesses for job retention and certain other expenses.  The PPP loan program was administered by the Small Business Administration (SBA).  Under the rules applicable at the time of the loan covered by today’s settlement, certain nonprofit organizations were not eligible to receive a PPP loan. The United States alleges that Gull Lake Country Club was an ineligible nonprofit 501(c)(7) organization at the time it applied for the PPP loan.

          This settlement resolves the allegations brought in a lawsuit against Gull Lake Country Club filed under the qui tam or whistleblower provisions 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 qui tam lawsuit was filed by Relator Wade Riner and is captioned United States ex rel. Riner v. Bay Harbor Yacht Club, et al., No. 1:24-cv-284 (W.D. Mich.).

          The U.S. Attorney’s Office for the Western District of Michigan has demonstrated a steady commitment to hold accountable individuals and organizations that received pandemic-related funds, but did not comply with eligibility requirements or other rules.  For example, the Office has announced the following cases since 2022:

• March 4, 2022 – Two Men Sentenced for Paycheck Protection Program Loan Fraud.
• March 13, 2023 - Michigan Nonprofit Organizations Agree to Pay $225,887 to Settle False Claims Act Allegations Relating to Improper Receipt of Paycheck Protection Program Loans
• June 22, 2022 – Owners of Grand Rapids Trucking Company Plead Guilty to Bank Fraud Conspiracy, Pay $1,000,000 In Related Civil Case, In Connection With COVID-10 Relief Fraud.
• November 18, 2022 – Former State Employee and Three Others Indicted for $1 Million COVID-19 Fraud Scheme.
• December 15, 2022 – Grand Rapids Man Pleads Guilty to Covid-19 Relief Fraud.
• December 21, 2022 – Judge Sends Cocaine Dealer to Prison for Covid-Relief Fraud.
• February 23, 2023 – Former Police Officer Sentenced for Money Laundering ($500,000 in fraudulently obtained COVID-19 relief funds).
• December 5, 2023 – Roshell Beaty Sentenced to 124 Months in Prison for Over $1 Million in COVID Fraud.
• June 18, 2024 – Northern Michigan Physician Assistant Charged with Covid-19 Pandemic Assistance Fraud.

          Assistant U.S. Attorneys Andrew J. Hull and Whitney M. Schnurr investigated this matter.

          The claims resolved by the settlement are allegations only and there has been no determination of liability.

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