Hawthorne Machinery PPP Loan Fraud Suit to Proceed, Court Says

A whistleblower adequately alleged that California-based Hawthorne Machinery Co. and others violated the False Claims Act by misrepresenting how many employees the company had in order to receive a Paycheck Protection Program loan, a federal court said.

The PPP was enacted as part of the CARES Act in March 2020 to provide emergency loans in response to the Covid-19 pandemic.

Roger S. Craig has sufficiently claimed that Hawthorne knowingly failed to tell the government that it had more than 500 employees, and was therefore ineligible for the $8 million loan it received under Small Business Administration rules, Judge William Q. ...