Washington, D.C. – Two California-based businesses and their owners have agreed to pay over $153,000 to settle allegations that they falsely represented their eligibility to obtain Paycheck Protection Program (PPP) loans during the COVID-19 pandemic, the U.S. Department of Justice announced Thursday.
JEV&B Services LLC and D4 Inc., along with their owners William Nelson and Vicki Rollins, allegedly violated the False Claims Act by submitting misleading information in loan applications to secure PPP funding for which they were not qualified. According to federal authorities, the businesses knowingly underreported their number of employees and failed to disclose affiliated companies to gain access to second-draw PPP loans.
Background on the PPP and Alleged Misconduct
The PPP was established in March 2020 under the CARES Act to assist small businesses in keeping their workforce employed during the pandemic. Administered by the Small Business Administration (SBA), the program allowed for forgivable loans to eligible businesses. A second round of funding introduced in 2021 came with stricter eligibility rules, including a cap of 300 employees, factoring in affiliated entities.
Authorities allege that Nelson and Rollins controlled multiple companies that collectively exceeded the size limitations for second-draw loans. Despite this, JEV&B Services and D4 submitted applications omitting key details about their affiliations and falsely certifying their eligibility.
Both companies received first- and second-draw PPP loans, which were later forgiven by the SBA. The Justice Department stated that the companies’ misrepresentations caused the SBA to wrongly guarantee the loans and reimburse lender processing fees.
Settlement Terms and Whistleblower Involvement
As part of the civil settlement, JEV&B Services, D4 Inc., Nelson, and Rollins have agreed to:
Pay $153,598.90 to the federal government, covering the cost of the improperly obtained loans and associated SBA processing fees. Repay the PPP loans in full, relieving the SBA of any further liability under the federal loan guarantee.
The case originated from a whistleblower complaint filed under the False Claims Act’s qui tam provisions by Ashwani Chawla, who will receive $11,519.92 as part of the settlement.
The lawsuit was filed in the U.S. District Court for the Central District of California under the case title U.S. ex rel. Ashwani Chawla v. Agathos Support Service, Inc., et al.
“This resolution reflects our continued commitment to protecting taxpayer-funded pandemic relief programs from fraud and abuse,” the Justice Department stated.
Officials emphasized that the settlement resolves allegations only and that no determination of liability has been made.
