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Lawsuit Alleges CEO Misappropriated PPP Funding

The federal Paycheck Protection Program (PPP) was implemented as a response to the COVID-19 pandemic, providing small businesses with some federal funding to keep workers employed during the tough financial times caused by the virus. All money from that program was required to be used for business purposes only. However, there have been a variety of instances of fraud related to PPP funding that have made news over the last several months.

One recent lawsuit was filed in Florida, in which the plaintiff alleged Starboard Group Management Co., Inc. alleged wrongful termination and sexual harassment on the part of her supervisor.

Case background

The plaintiff served as the defendant’s vice president of legal affairs and human resources until the time of her termination on June 1. In addition to her allegations of sexual harassment, she also claims she was instructed to make false statements to creditors, vendors, landlords and other suppliers of the company. She states her superiors required her to tell those entities the employer was unable to meet its financial obligations because it did not receive PPP funds.

However, the company had in fact received PPP benefits to the tune of nearly $9 million. According to the plaintiff, the CEO of the company used approximately $1 million of this money to finance a new home in Montana, and also told her to characterize some employees in Montana as corporate employees as a means of defrauding the Small Business Administration and the federal government.

The plaintiff says when she complained to her supervisor about these fraudulent actions, she was terminated as a result in a manner violating whistleblower protections.

If you are aware of wrongdoing in your company or organization related to the COVID-19 pandemic, contact an experienced whistleblower lawyer at Kardell Law Group to learn about the legal recourse you have available to you.

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