The Buffalo Club has agreed to pay $1.5 million to resolve allegations it obtained a Paycheck Protection Program (PPP) loan improperly in March 2021, the U.S. Attorney’s Office announced Friday.
According to a complaint by the federal government, The Buffalo Club applied to the U.S. Small Business Administration for a PPP loan and certified that it was eligible to receive the loan. Then after receiving it, the Club sought and received forgiveness of the entire loan amount.
“For decades, the SBA has explained that private clubs and businesses, which limit the number of memberships for any reason other than capacity, or restrict patronage for any reason other than capacity, are not eligible for loans through the SBA. The SBA’s guidance also specifically states that this restriction applies to eligibility for PPP loans,” explained the U.S. Attorney’s Office in a written statement.
Prosecutors contended that the institution falsely represented its eligibility, because it operated as a private membership club that restricted admission for reasons other than capacity. However, under the settlement, the claims resolved remain allegations only, and the settlement is not an admission of liability.
As part of the PPP loan program, enacted in March 2020 to provide emergency relief to Americans economically impacted by the COVID-19 pandemic, eligible small businesses were eligible to receive loans guaranteed by the federal government.