In response to the immediate challenges posed by the COVID-19 pandemic in March 2020, Congress granted the federal Small Business Administration (SBA) the authority to administer emergency loans through the Paycheck Protection Program (PPP). These federally guaranteed loans were designed to assist eligible businesses in covering essential expenses such as payroll and rent during government-imposed shutdowns. Notably, these loans, including associated interest and fees, could potentially be forgiven.

However, the SBA, consistent with longstanding regulations, excluded certain businesses from participating in the program, including businesses registered as agents of foreign governments under the Foreign Agents Registration Act (FARA). MWW, a public relations firm based in New Jersey, was ineligible because it had registered as a foreign agent to provide services to the Israeli Tourism Bureau. Despite this exclusion, MWW applied for and received a $2 million PPP loan, which later was forgiven.

Aidan Forsyth, an entrepreneur from New York, took legal action on behalf of the U.S. government by filing a “qui tam” lawsuit under the federal False Claims Act in the District of New Jersey. Represented by Eric H. Jaso, Esq. of Spiro Harrison & Nelson, Forsyth alleged that MWW had fraudulently obtained the PPP loan, costing the Government the forgiven amount of the loan plus interest, expense, and fees. Through the New Jersey U.S. Attorney’s Office, the Department of Justice intervened in Forsyth’s case and obtained a $2.3 million settlement. As a reward under the False Claims Act, Mr. Forsyth will receive a portion of the government’s recovery.

Eric H. Jaso, himself a former Justice Department prosecutor, commented: “When the Federal Government responded to the COVID economic emergency by quickly providing billions in forgivable loans to small businesses to stay afloat and keep paying their employees, some took advantage by obtaining money they never were entitled to receive. Mr. Forsyth should be commended for his initiative in bringing MWW’s wrongdoing to the Government’s attention and enabling prosecutors to recover ill-gotten taxpayer money”