When Oregon lawyer J. Bryan Quesenberry learned that the federal government was sending out hundreds of billions of dollars to help businesses survive during the pandemic, he thought: “There’s going to be fraud here. There just has to be.” Quesenberry looked through a list of businesses that received Paycheck Protection Program loans, intended to help small businesses ravaged by the pandemic continue paying their employees. Quesenberry knew businesses were not allowed to receive more than one loan during a single round, so he searched for “double dippers.” He found dozens of businesses that appeared to improperly obtain PPP loans, and started suing those firms to help the government recover funds. As federal officials try to retrieve billions in stolen pandemic relief funds, private citizens are scouring public data, company websites and social media pages to help identify potential cases. Those who have filed suits say they are motivated by the desire to root out wrongdoers and expose corporate fraud, reports the New York Times.
Under the False Claims Act, private citizens can file lawsuits on behalf of the federal government against those who may have defrauded the U.S. If the government recovers funds, those citizens can typically earn between 15 and 30 percent of that amount. That has allowed some private citizens to earn hundreds of thousands of dollars, sometimes more than $1 million, for chasing pandemic relief fraud. Some argue that the law was meant to encourage whistle-blowers with insider knowledge to come forward. Some private citizens who have filed suits relied heavily on publicly available information, stitching together evidence they sourced from the internet to build their cases. The armchair sleuthing highlights how widespread pandemic fraud was and how federal investigators have struggled to keep up with it. The Small Business Administration’s inspector general has estimated that more than $200 billion — at least 17 percent of the pandemic loans the agency distributed — was awarded to “potentially fraudulent actors.” The effort by some private citizens to uncover pandemic fraud has not been warmly received by former officials who worry that a deluge of lawsuits that lack insider knowledge could be straining federal resources. As of April 1, the Justice Department had opened more than 1,200 civil pandemic fraud matters, including more than 600 whistle-blower cases.
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