The Tellico Village Property Owners Association has agreed to pay more than $1.3 million after applying for, receiving, and obtaining a Paycheck Protection Program loan it was not eligible for.
Tellico Village POA Loan
The Coronavirus Pandemic shook the world in 2020. Many homeowners associations were unsure how to continue operations and conduct meetings. Like most other organizations, the pandemic also put many of them in financial crisis. Some HOAs, including the Tellico Village Property Owners Association (TVPOA) in Knoxville, Tennessee, chose to obtain funding from the government.
In March 2020, Congress created the Paycheck Protection Program (PPP) loan as part of the CARES Act. It helped organizations stay in business and employ their workers during the crisis. The program ended on March 31, 2021. However, existing borrowers with PPP loans could apply for loan forgiveness.
Like most Tennessee homeowners associations, the Tellico Village POA is incorporated as a non-profit. TVPOA represented it was eligible for the PPP loan and applied in April 2020. It received payment and subsequently obtained forgiveness for the loan.
Ineligibility Determined After Lawsuit
The Tellico Village POA was found to be ineligible for the PPP loan after a lawsuit was filed under the whistleblower provisions of the False Claims Act. This Act allowed private parties to take legal action on the government’s behalf for false claims and receive part of any recovery.
According to the United States Department of Justice, the Tellico Village POA cooperated with the investigation and stated that the application form misstatements were unintentional. The association agreed to pay a settlement of $1,361,992.22 to resolve the lawsuit.
