Date: 06-05-2024

Case Style:

United States of America v. Mount Zion Baptist Church

Case Number: 3:23-cv-0024

Judge: Eli J. Richardson

Court: The United States District Court for the Middle District of Tennessee (Davidson County)

Plaintiff's Attorney: The United States Attorney’s Office in Nashville

Defendant's Attorney:

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Description:

Nashville, Tennessee criminal defense lawyer represented the Defendant charged with Misusing Paycheck Protection Program Loan Funds
Mount Zion Baptist Church Agrees to Pay Over $70,000 to Settle Allegations of Misusing Paycheck Protection Program Loan Funds

Mount Zion Baptist Church (“MZB”) has agreed to pay $70,464.39 to settle civil claims that it misused a Paycheck Protection Program (“PPP”) loan. This agreement resolves allegations that MZB unjustly enriched itself by improperly using the PPP loan to make mortgage principal payments in violation of the PPP regulations.

The United States alleged that MZB applied for a PPP loan in April 2020, certifying that the loan would be used only for purposes permitted under the PPP regulations, including mortgage interest payments. But on May 29, 2020, MZB made two separate mortgage principal payments totaling $70,464.39, in violation of the PPP requirements. On May 1, 2021, MZB applied for full forgiveness of its PPP loan, certifying that it used the entirety of the loan funds to pay business expenses that were eligible for forgiveness. As a result, on May 17, 2021, the Small Business Administration (“SBA”) approved MZB’s application for PPP loan forgiveness, including the portion of the loan that the United States contends that MZB used for mortgage principal payments.

Congress created the PPP in March 2020, as part of the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, to provide emergency financial support to the millions of Americans suffering from the economic effects caused by the COVID-19 pandemic. The CARES Act authorized billions of dollars in forgivable loans to small businesses struggling to pay employees and other business expenses. This settlement resolves allegations that MZB was unjustly enriched by taking PPP funds that it used improperly for purposes that were not allowed by the PPP.

The litigation resolved by this case originally was brought under the qui tam or whistleblower provisions of the False Claims Act by Kiara Moore, a former employee of MZB. Under the whistleblower provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. In this case, Moore will receive $10,569.66 of the settlement funds. The litigation, which is concluded by the settlement announced today, is captioned United States ex rel. Moore v. Mount Zion Baptist Church, Case No. 3:23-cv-0024 (M.D. Tenn.).

This matter was handled by Assistant U.S. Attorney S. Jae Lim of the Middle District of Tennessee, with assistance from the SBA’s Office of General Counsel.

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.

Outcome:

Defendant was found guilty and agreed to pay $70,464.39 to settle civil claims

Plaintiff's Experts:

Defendant's Experts:

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