Think Tank Agrees to Pay More Than $500,000 to Resolve Allegations That It Falsely Certified Its Eligibility to Receive PPP Loan

BOSTON – The U.S. Attorney’s Office has reached a $501,161 settlement with the Institute for Policy Studies (IPS), a nonprofit headquartered in Washington, D.C., to resolve allegations that IPS falsely certified that it was eligible to receive a Second Draw Paycheck Protection Program (PPP) Loan from the Small Business Administration (SBA). As part of the settlement, IPS admits that it certified to the SBA that it was not a think tank primarily engaged in political or lobbying activities, when it had publicly stated otherwise.  

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who were suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of forgivable loans to small businesses for job retention and certain approved expenses, through the PPP. Entities that applied for Second Draw PPP loans were required to certify their eligibility for the loan, including that they were not “primarily engaged in political or lobbying activities.”

IPS conducts research and publishes reports to influence public policy. As detailed in the settlement agreement, on Feb. 11, 2021, IPS submitted an application for a Second Draw PPP loan from SBA. In its application, IPS certified that it was “not a business concern or entity primarily engaged in political or lobbying activities, including any entity that is organized for research or for engaging in advocacy in areas such as public policy or political strategy or otherwise describes itself as a think tank in any public documents.” But, as IPS admits, IPS has described itself as a “think tank” in various sections of its website, on LinkedIn, and in various public documents, including reports and press releases. Per its corporate bylaws, “The purpose of IPS is to conduct research to produce publications, and to educate the public on important matters of public policy.” Among many other objectives, IPS’ Strategic Plan for 2021-2022 included lobbying activities such as “leveraging public scholarship for social movements with progressives in Congress.” 

The United States contends that IPS was ineligible for a Second Draw PPP loan, which it received only after falsely certifying to SBA that it was not primarily engaged in political or lobbying activities. 

The settlement stems from allegations originally brought in a lawsuit filed by a whistleblower under the qui tam provisions of the False Claims Act, which allow private parties, known as relators, to bring suit on behalf of the government and to share in any recovery. In connection with today’s announced settlement, the relator will receive 10 percent of the recovery. 

Acting U.S. Attorney Joshua S. Levy and Isabella Casillas Guzman, Administrator of the U.S. Small Business Administration made the announcement today. Assistant U.S. Attorneys Julien M. Mundele and Jessica J. Weber of Levy’s Affirmative Civil Enforcement Unit handled the matter. 

On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud.  The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts.  For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
 
Anyone with information about allegations of attempted fraud involving COVID-19 can 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.