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Rensselaerville Institute settles PPP fraud case

Oct 27, 2022 12:45 am

Liz Montgomery reports for Porcupine Soup that the Rensselaerville Institute has agreed to pay the federal government more than $86,000 in damages and civil penalties to resolve allegations that it violated the False Claims Act by obtaining an inflated Paycheck Protection Program loan. The Albany County-based not-for-profit corporation also agreed to repay its lender, thereby relieving the U.S. Small Business Administration of liability for the federal guaranty of the overstated portion of its loan, according to an announcement by U.S. Attorney Carla B. Freedman. The PPP was established by the Coronavirus Aid, Relief, and Economic Security, or CARES Act, in March 2020, to provide emergency financial assistance to small businesses suffering the economic impacts of the COVID-19 pandemic. The Institute acknowledged in the settlement agreement that, in early April 2020, its now-former chief financial officer provided another now-former Institute official with data and calculations showing their “average monthly payroll” totaled less than $500,000. But that person went ahead and, on the Institute’s behalf, applied to an SBA participating lender for a $500,000 PPP loan. Then, rather than return the excess funds, in January 2021, yet another Institute official submitted an application for the forgiveness of the entire half million. The SBA subsequently determined that the Institute had overstated its average monthly payroll and, accordingly, declined to forgive $86,676 of the loan. The case began in August 2021, when a whistleblower filed a complaint under seal in the U.S. District Court for the Northern District of New York. Formerly based in Rensselaerville, the Institute is now located in Albany and it focuses on educational services. Read the full story at porcupine soup [dot] com.

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