Press Release: 8/18/2025

Nonprofit Agrees to Pay $1 Million to Resolve Allegations of PPP Loan Fraud

Friday, August 15, 2025

For Immediate Release

 

BOSTON –  The Energy Federation, Inc. (EFI), a Franklin-based 501(c)(4) nonprofit organization that provides advice on promoting energy efficiency and heating assistance to homeowners, has agreed to pay $1 million to resolve allegations that it violated the False Claims Act by obtaining a Paycheck Protection Program (PPP) loan for which it was not eligible.

Congress enacted the PPP to assist small businesses in response to the economic challenges from the COVID-19 pandemic. Under the program, if borrowers complied with the program’s rules, the SBA forgave their loans. The SBA administered the PPP in two rounds – first in April 2020 and then again in February 2021. The PPP program permitted certain nonprofit organizations to obtain PPP loans, but 501(c)(4) organizations, like EFI, were never eligible.

As part of the settlement, EFI admitted that, after discussing whether it was eligible with the bank processing its loan application, it submitted a PPP loan application without disclosing to SBA that it was a 501(c)(4) organization. In its loan application, EFI certified that it was eligible to receive a loan under the rules in effect at the time its application was submitted. After receiving a PPP loan, EFI later applied for, and received, loan forgiveness based on the eligibility certifications in its PPP loan application and its loan forgiveness application.  

The settlement stems from allegations originally brought in a lawsuit filed by a whistleblower under the qui tam provisions of the False Claims Act, which allow private parties, known as relators, to bring suit on behalf of the government and to share in any recovery. In connection with today’s announced settlement, the relator will receive 10 percent of the recovery.

United States Attorney Leah B. Foley and the U.S. Small Business Administration made the announcement today. Assistant U.S. Attorney Julien M. Mundele of the Affirmative Civil Enforcement Unit handled the matter.