The Small Business Administration (SBA) provides financial assistance to small businesses by guaranteeing up to 85% of the value of loans made by private lenders.  However, large and otherwise ineligible businesses have illegally obtained billions of dollars by falsely certifying compliance with SBA requirements.  Examples of false certification may involve misrepresentations regarding a company’s minority status or affiliation with a larger contractor.  Either the business obtaining the loan or the private company lending the money may be liable under the FCA for falsifying information in the process of obtaining a loan through the SBA.

Example

Ciena Capital, an SBA loan provider, allegedly engaged in the falsification of loan documents, inflation of property appraisals, and the use of straw purchasers to engage in sham transactions.  In this case it was the loan provider, not the individual business, that supplied the government with false information which resulted in improper payment.  This conduct resulted in a $26.3 million settlement in May 2010.