The Buffalo Club agrees to pay $1.5 million to resolve False Claims Act allegations related to Paycheck Protection Program loan eligibility

BUFFALO, N.Y. - The U.S. Attorney's Office announced today that The Buffalo Club has agreed to pay $1,500,000 to resolve allegations that it improperly obtained a Paycheck Protection Program (PPP) loan from the U.S. Small Business Administration (SBA), which it was not eligible to receive.

The PPP loan program, enacted in March 2020, provided emergency financial assistance to Americans suffering from the economic effects of the COVID-19 pandemic. The program allowed eligible small businesses to receive loans guaranteed by the federal government.

For decades, the SBA has explained that private clubs and businesses, which limit the number of memberships for any reason other than capacity, or restrict patronage for any reason other than capacity, are not eligible for loans through the SBA. The SBA's guidance also specifically states that this restriction applies to eligibility for PPP loans.

In March 2021, The Buffalo Club applied for a PPP loan and certified that it was eligible to receive the loan. After receiving the PPP loan, The Buffalo Club sought and received forgiveness of the entire loan amount. The United States contended that The Buffalo Club falsely represented its eligibility to receive the PPP loan because it operated as a private membership club that restricted membership for reasons other than capacity.

This matter was handled by Assistant U.S. Attorney Jonathan W. Ferris, and Investigator Margaret McFarland, with assistance from the SBA's Office of General Counsel.

The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act. Under the qui tam provisions of the False Claims Act, a private party can file an action on behalf of the United States and receive a portion of the settlement or judgment. The claims resolved by the settlement are allegations only; there has been no determination or admission of liability.

Individuals with information about allegations of fraud involving COVID-19 are encouraged to report it by calling the Department of Justice's National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

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