U.S. Attorney: Northern Mississippi District has obtained more PPP fraud judgments than any other district

Published 9:12 am Friday, June 9, 2023

Lawyers for the U.S. Attorney’s Office for the Northern District of Mississippi have obtained more false claim judgments involving COVID Paycheck Protection Funds than any other federal court district in the country.

U.S. Attorney Clay Joyner announced that in addition to the 150 False Claims Act judgments that have been obtained since his office started investing PPP fraud, his office continues to investigate fraud involving the Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act.

“We anticipate focusing on PPP fraud for several years to come and are proud to be recovering taxpayer money,” Joyner said.”We will not allow fraud schemes to remain unchecked in our district and we will use all civil and criminal remedies available to hold accountable those who committed fraud.”

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A comprehensive investigation by the office’s Civil Division has resulted in over $20 million dollars in judgments to date, a news release from Joyner’s office announced. Specifically, the investigation is using the False Claims Act, 31 U.S.C. §§ 3729-3733 to target fraudulent loans obtained through the Paycheck Protection Program.

The investigations into PPP fraud by the U.S. Attorney’s Office for the Northern District of Mississippi have been ongoing for approximately 12 months and have expanded to areas all across the District.  Recent amendments to federal law have extended the statute of limitations for civil and criminal fraud enforcement actions involving PPP loans from six years to a period of up to ten years.

In addition to allowing the government to recover treble damages or triple the amount of the PPP loan, the False Claims Act also allows the United States to recover up to $27,018 in penalties for each PPP loan, bank processing fees, and a $402 court filing fee.

In addition to the civil judgments the office has obtained, investigations initiated by the Civil Division’s Affirmative Civil Enforcement Attorney, Harland Webster, have also uncovered fraud schemes that subsequently resulted in criminal prosecutions.  One includes Chris Lick of Starkville, Mississippi, who was sentenced to 78 months for submitting a fraudulent PPP loan application and has a $12,000,000 civil judgment.  Another example is Mississippi attorney and SBA employee LaKeith Faulkner, who was sentenced to 62 months and ordered to pay $10,600,000 in restitution for his role in a scheme to obtain fraudulent PPP loans.

Civil Chief John E. Gough, Jr. stated, “We are uncovering fraud throughout our district. This fraud scheme was rampant, and we would like the public’s help in recovering these ill-gotten funds. If you have a tip regarding potential fraud in our district, please contact us by sending an email to CovidFraudNDMS@usdoj.gov .”