Triple Damages Under the False Claims Act for PPP Fraud

Thanks for visiting Federal Lawyers – a second-generation law firm managed by our lead attorney. We have over 40 years of combined experience defending federal civil and criminal cases. If you obtained a PPP loan through fraud, you face more than just criminal prosecution. The Department of Justice can sue you under the False Claims Act for triple damages plus massive civil penalties – and they’re doing it aggressively in 2025.

The False Claims Act Triples Your Exposure

The False Claims Act, 31 USC §3729, allows the government to recover three times the amount of damages it suffered from fraud. If you obtained a $100,000 PPP loan fraudulently, the civil exposure is $300,000 in treble damages – before penalties.

This isn’t a criminal penalty. It’s a civil remedy. The government doesn’t need to prove guilt beyond a reasonable doubt. They only need to show by a preponderance of the evidence that you knowingly submitted a false claim.

In September 2025, Third Way – a non-profit organization – agreed to pay $1,949,542 to resolve False Claims Act allegations involving a PPP loan of $974,771. The settlement was exactly double the loan amount, showing that DOJ is using a multiplier of 1.5 to 2 rather than the full treble damages in negotiated settlements.

But if you don’t settle and the government wins at trial, they get the full triple damages amount. The statute gives them that right.

Civil Penalties Add Tens of Thousands Per Claim

On top of treble damages, the False Claims Act authorizes civil penalties adjusted annually for inflation. In 2025, the penalty is up to $28,619 per false claim.

Each fraudulent PPP loan application can count as a separate false claim. If you submitted three applications, that’s potentially $85,857 in penalties on top of triple damages. The penalties alone can exceed the underlying fraud amount in small cases.

Say you obtained $20,000 through a fraudulent PPP application. The civil exposure is $60,000 in treble damages plus $28,619 in penalties – a total of $88,619. You stole $20,000 and you owe nearly $90,000.

What Counts as a False Claim

A false claim under the FCA includes any request for payment from the government based on fraudulent information. Submitting a PPP loan application with false certifications about your business, employees or payroll qualifies.

DEFENSE TEAM SPOTLIGHT

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Legal Scenario: What Would You Do?

Scenario

You submitted a PPP loan application during COVID and now realize some employee count numbers may have been inaccurate.

Could this be considered fraud?

Attorney's Answer

Inaccuracies in PPP applications can trigger federal fraud charges carrying up to 20 years in prison. However, honest mistakes differ from intentional misrepresentation. Documentation of your good-faith efforts is critical to your defense.

This is general information only. Contact us for advice specific to your situation.

The certification that you met the necessity requirement – that economic conditions made the loan necessary to support ongoing operations – is a claim. Courts have held that falsely certifying necessity constitutes a false claim even if your business technically existed.

Using someone else’s Social Security number or EIN on the application creates an additional false claim. Submitting fake tax documents or fabricated payroll records creates more false claims. Each false statement or document can be counted separately.

You Don’t Need a Criminal Conviction to Face FCA Liability