Mac Schneider, U.S. Attorney | U.S. Attorney's Office for the District of North Dakota
Mac Schneider, U.S. Attorney | U.S. Attorney's Office for the District of North Dakota
The United States Attorney’s Office for the District of North Dakota announced a settlement with Education for Just Peace in the Middle East, which operates as the US Campaign for Palestinian Rights (EfJP), regarding its participation in the Small Business Administration’s Paycheck Protection Program (PPP). The non-profit organization paid $353,000 to resolve allegations related to its receipt and forgiveness of PPP loans under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).
Congress passed the CARES Act in March 2020 to provide financial support during the COVID-19 pandemic. The law authorized forgivable PPP loans for small businesses and certain non-profits facing economic hardship. EfJP applied for and received First Draw and Second Draw PPP loans totaling $308,905.28.
Applicants for these loans were required to certify their eligibility according to rules in place at the time. Regulations stated that organizations primarily engaged in political or lobbying activities were not eligible for SBA loans. For Second Draw loans, applicants also had to confirm they were not organized primarily for advocacy or public policy research.
The settlement resolves a whistleblower lawsuit filed by TZAC, Inc., a New York-based non-profit, under the False Claims Act’s qui tam provisions. TZAC alleged that EfJP was not eligible for participation in the Second Draw loan program. Following an investigation by federal authorities, EfJP agreed to pay an amount covering repayment of loan principal, interest, lender fees, a share of recovery for TZAC consistent with the False Claims Act, and other case-related expenses. The claims resolved are civil allegations only; there has been no finding of liability and EfJP denies any wrongdoing.
The case is titled United States of America ex rel. TZAC, Inc. v. Education for Just Peace in Middle East a/k/a United States Campaign for Palestinian Rights (U.S. District Court, District of North Dakota Case No. 1:22-cv-00137-DLH-CRH). Assistant United States Attorneys James Patrick Thomas and Michael D. Schoepf represented the government.
U.S. Attorney Nicholas W. Chase recognized Special Agent Sandra E. Mazzoni from SBA’s Office of Inspector General and Trial Attorney Kandace Zelaya from SBA’s Office of General Counsel for their roles in investigating and settling the matter.
SBA General Counsel Wendell Davis stated: “Investigations like this one reflect collaboration of the Small Business Administration, including SBA’s Office of General Counsel and Office of Inspector General, and the U.S. Attorney’s Office. When whistleblowers uncover potentially fraudulent conduct, we work to recover SBA funds improperly obtained.”
More information about the Department of Justice's response to COVID-19 can be found at https://www.justice.gov/coronavirus. Reports of suspected fraud involving pandemic relief programs can be submitted through the National Center for Disaster Fraud Hotline at 866-720-5721 or online at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
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