During the first eight months of 2025, our team has paid close attention to the Trump administration’s strategy for civil and criminal enforcement concerning fraud related to Paycheck Protection Program (PPP) loans. In April, Jonathan Porter and Robert Peabody discussed the Department of Justice’s use of the False Claims Act (FCA)—a civil enforcement tool—to enforce potentially criminal COVID-related fraud. In May, Rebecca Furdek, Kyle Gilster, and Emily Loftis explained the framework for ongoing PPP loan audits and investigations, followed in August by a mid-year update regarding enforcement trends and notable cases.
These and other thought leadership pieces address the origination of the PPP loan landscape during COVID-19; the rise of audits, investigations, and enforcement actions through which these and similar loans have been scrutinized; and the basic elements of the civil and criminal enforcement frameworks used to prosecute fraudulent conduct in connection with these loans.
This post explores the federal government’s ongoing efforts to combat PPP-related fraud, focusing on emerging civil enforcement trends and theories of liability under the False Claims Act.
FCA Enforcement of PPP Loan Fraud
DOJ has prioritized the investigation of PPP loan fraud through the FCA both before and during the current administration. Under the FCA, either the federal government directly or a qui tam relator can initiate a PPP-related lawsuit.
One of the clearest throughlines of civil PPP enforcement is the focus on representations made by loan applicants to the Small Business Administration (SBA) regarding company size and affiliation. The SBA administered the PPP emergency loan program, which was meant to provide assistance to smallbusinesses struggling due to the COVID-19 pandemic and the resulting economic fallout. Borrowers were required to certify the truthfulness and accuracy of the information in their loan application and their compliance with the PPP rules, including limitations on borrower company size and number of employees, and guidance about how size should be calculated depending on company grouping and affiliation rules.
DOJ has recently reported several notable multimillion dollar PPP fraud settlements arising out of size misrepresentation issues. In a qui tam case settled in July of this year a group of U.S. restaurants agreed to pay over $3.5 million to resolve allegations of fraudulently obtaining PPP loans in violation of the FCA. According to the DOJ, the settlement contained an admission by the restaurant group that its entities “collectively received and were granted loan forgiveness for second-draw loans in a total amount that exceeded the applicable corporate group limit for second-draw loans.”
Similarly, in April 2025, a group of affiliated companies operating under a family office (and representing brands in industries ranging from senior living to cheesemaking) agreed to pay over $10.8 million without any admission of liability to resolve allegations that they fraudulently misrepresented the size of their businesses in obtaining loans. Specifically, the four entities collectively were alleged to have received six PPP loans totaling over $5 million, despite allegedly employing more than 500 individuals collectively.
In February 2025, a Michigan-based company owned by a Chinese government entity settled FCA allegations for $14.2 million after being accused of falsely certifying eligibility and obtaining a $9.6 million PPP loan, despite allegedly exceeding employee limits and being disqualified as a government-owned entity. The settlement is also notable as the defendant’s alleged ineligibility for the PPP loans also turned on its status as a Chinese-government-owned company, reflecting another potential emerging trend of FCA enforcement focused on multinational companies, particularly those that may have complete or partial foreign government ownership.
Last month, a group of automotive part companies were alleged to have falsely certified their PPP eligibility because they were affiliated with companies in other countries and were allegedly owned by a government entity. The companies agreed to pay over $21 million to resolve the allegations, though they did notably receive cooperation credit—reiterating the potential benefit of timely disclosure, cooperation, and remediation in FCA cases.
The DOJ’s enforcement extends beyond high-dollar and large-entity cases. For example, two California companies allegedly submitted false statements and certifications to obtain PPP loans for which they were not eligible by underreporting employee numbers, failing to disclose affiliated companies, and falsely certifying eligibility for second-draw loans. The defendants agreed to pay $153,598.90 to resolve the government’s allegations and to repay the loans in full. A portion of the settlement was awarded to the qui tam whistleblower.
Conclusion and Takeaways
PPP enforcement remains a top priority, and the federal government is utilizing the well-established FCA enforcement scheme to target PPP loan recipients. Businesses of all sizes should consider reviewing representations made as part of PPP or a similar loan application to ensure accuracy and might consider paying particular attention to representations made related to (i) business size, including with any affiliated entities; and (ii) company connections to or ownership by foreign governments or foreign government-adjacent entities.