Brairwood Country Club in Sun City West will pay back $631,400 to resolve allegations that it violated the False Claims Act.knowingly obtainong a loan under the Paycheck Protection Program (PPP), which the organization was not eligible for.

When Congress enacted the Coronavirus, Aid, Relief, and Economic Security (CARES) Act, it authorized forgivable PPP loans to eligible small businesses for job retention and certain other expenses. The PPP loan program was administered by the Small Business Administration (SBA). At the time of the loan covered by this settlement, certain entities organized under section 501(c) of the Internal Revenue Code were not eligible for PPP loans, including 501(c)(7) organizations.

In May 2020, Briarwood applied for a PPP loan in the amount of $431,800 and certified that it was eligible to receive the loan even though it was ineligible as a 501(c)(7) nonprofit organization. After receiving the PPP loan, Briarwood sought and received forgiveness of the loan. The United States contended that Briarwood knew or should have known it was ineligible to receive the PPP loan, and that it caused the SBA to pay lender fees to the bank that processed the loans. Briarwood will pay $631,400 to the United States to resolve these allegations.

“PPP loans were an important but finite resource to help save small businesses across America during a generational pandemic,” stated U.S. Attorney Gary Restaino. “But Congress did not intend this vital resource to cover ‘social clubs’ like Briarwood. Thanks to the Small Business Administration for vindicating program rules and protecting the public fisc.”

The settlement resolves claims brought under the qui tam or whistleblower provisions of the False Claims Act. Under these provisions, a private party can file an action on behalf of the United States and receive a portion of the recovery. The qui tam complaint was filed by Relator Wade Riner and is captioned United States ex rel. Riner v. Recreation Centers of Sun City West, et al., No. 22-cv-01421 (D. Ariz.). Mr. Riner will receive a total share of approximately $63,400 in connection with the settlement.