Treasury Vows to Recoup Virus Relief Aid Claimed by Big Companies
Partner Megan Jeschke was quoted in a New York Times article discussing the ongoing controversy surrounding loans obtained through the Paycheck Protection Program (PPP). As it came to light that larger corporations such as Shake Shack and the Los Angeles Lakers franchise were able to secure loans, the program and the Small Business Administration (SBA) faced increased scrutiny. In response, Department of the Treasury Secretary Steven Mnuchin announced that large companies that received more than $2 million would be audited and possibly face legal action. However, as Ms. Jeschke and other attorneys noted, pursuing criminal claims against companies or banks would be complicated, considering that they obtained the loans according the rules the SBA and Congress made. Specifically, she said the PPP's ambiguous certification requirements meant it wasn't clear the companies or banks actually violated any rules.
"I do think there is some ambiguity in the certification requirement to show necessity to maintain ongoing operations," she said. "It doesn't say the company has to be facing furloughed employees, it doesn't require that they be facing imminent closure and it didn't require them to seek capital from other locations."
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