San Diego's Del Mar Fairgrounds, operated by the 22nd District Agricultural Association (DAA) and its CEO Carlene Moore, have consented to a $5.6 million settlement over allegations relating to a pandemic relief loan they weren't qualified for. The agreement addressed claims that the Fairgrounds wrongfully secured a $4.7 million Paycheck Protection Program (PPP) loan to support small businesses during the COVID-19 crisis. This news comes after the United States contested that the 22nd DAA was ineligible due to its status as a government-owned entity.
Congress created the Paycheck Protection Program as a component of the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2020. It intended to provide a financial lifeline for businesses reeling from the economic fallout of the pandemic. While many small businesses took advantage of the forgivable loans, the 22nd DAA, under the guise of a small business, received and later forgave a sizeable loan meant for those facing dire economic challenges. Carlene Moore, who was then the Deputy General Manager, played a pivotal role by signing and certifying the loan application—and a subsequent application for its forgiveness—assuring the accuracy of their eligibility, which has now been called into question.
According to a press release by the U.S. Attorney's Office for the Southern District of California, U.S. Attorney Tara McGrath commented on the matter, saying, "These loans were intended to provide critical relief to eligible businesses during a time of global crisis." "This settlement upholds the integrity of the COVID-relief program and holds the DAA accountable for obtaining millions in taxpayer-funded benefits to which they were not entitled." The settlement amounts to the loan principal plus interest and fees paid to the bank that processed the loan, totaling $5,664,015.
The case's resolution reflects concerted efforts by federal agencies to recapture funds from parties that were incorrectly granted government aid. SBA’s General Counsel Therese Meers, speaking on the matter, highlighted the joint pursuit, as stated by U.S. Department of Justice, "The favorable settlement in this case is the product of enhanced efforts by federal agencies such as the Small Business Administration working with the U.S. Attorney’s Office and the SBA’s Office of Inspector General to pursue recovery from those who obtained essential government program funds they weren’t eligible for." Assistant U.S. Attorney Joseph P. Price Jr. handled the case, leading to this significant financial recovery.
While the settlement resolves the allegations, it does not entail an admission of liability by the Del Mar Fairgrounds or Ms. Moore. Individuals with knowledge of attempted fraud related to COVID-19 programs are encouraged to report such matters through the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline or via the NCDF Web Complaint Form.
