Solar Energy Company Agrees to Resolve False Claims Act Allegations Related to Paycheck Protection Program Loan

AUSTIN – Freedom Solar LLC, a solar energy company that installs photovoltaic solar arrays for residential and commercial customers, has agreed to pay $425,710 to resolve allegations that it violated the False Claims Act in connection with a Paycheck Protection Program (PPP) loan.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act authorized forgivable PPP loans for small businesses experiencing economic uncertainty during the COVID-19 pandemic. In most cases, the maximum amount a small business could receive was 2.5 times its average monthly payroll. For purposes of calculating payroll costs, the CARES Act excluded any compensation to an individual employee in excess of an annual salary of $100,000.

Freedom Solar applied for a PPP loan in April 2020. The United States alleged that Freedom Solar failed to cap the annual salary of several employees at $100,000 when calculating its average monthly payroll. As a result, Freedom Solar overstated this number on its PPP loan application, which caused it to receive more PPP funds than it was entitled to receive. Freedom Solar later obtained forgiveness for the full amount of its PPP loan.

The civil settlement resolved a lawsuit filed under the qui tam or whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery. The qui tam lawsuit is captioned United States ex rel. Mossburg v. Freedom Solar, LLC, et al., Case No. 1:23-cv-00908 (W.D. Tex.).

Assistant U.S. Attorney Thomas Parnham negotiated the settlement on behalf of the government.

The claims resolved by the settlement are allegations only and there has been no determination of liability.

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