PHOENIX, AZ – Briarwood Country Club, Inc., a private social club in Sun City, has agreed to pay $631,400 to settle claims that it wrongfully received and forgave a Paycheck Protection Program (PPP) loan for which it was not eligible. The U.S. Attorney’s Office for the District of Arizona announced the settlement Wednesday, citing alleged violations of the False Claims Act.
The PPP, part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, provided forgivable loans to eligible small businesses to help maintain payroll and other expenses during the COVID-19 pandemic. However, the program excluded certain entities, including 501(c)(7) organizations, from receiving loans. Briarwood, a 501(c)(7) social club, allegedly certified its eligibility for a $431,800 PPP loan in May 2020 and later received loan forgiveness, actions that the U.S. contends were knowingly misleading.
“Congress designed PPP as a crucial lifeline for small businesses but not for 501(c)(7) social clubs like Briarwood,” said U.S. Attorney Gary Restaino. “This settlement demonstrates the importance of enforcing program rules to preserve public funds.”
The case, initiated by a whistleblower complaint filed by Wade Riner under the False Claims Act’s qui tam provisions, allows private citizens to report fraud on behalf of the United States. Riner will receive about $63,400 for his role in exposing the alleged misconduct.
The case was a joint effort of the U.S. Attorney’s Office for the District of Arizona, the Small Business Administration’s Office of General Counsel and Office of Inspector General, and additional federal law enforcement agencies.
