Marymount Manhattan College has agreed to pay $8.39 million to settle allegations related to its receipt of a Paycheck Protection Program (PPP) loan. The settlement follows claims by the U.S. Attorney’s Office for the Southern District of New York that the college exceeded the program’s size eligibility requirements, which were established to provide financial assistance to small businesses and nonprofit organizations affected by the COVID-19 pandemic.
In a Department of Justice press release, U.S. Attorney Jay Clayton stated that the Paycheck Protection Program was established to offer forgivable loans to businesses facing financial challenges due to the pandemic. He added that some recipients did not meet the program’s eligibility requirements and said his office will continue pursuing cases involving improper use of public funds.
SBA Office of Inspector General Special Agent in Charge Amaleka McCall-Brathwaite stated that some entities misrepresented their eligibility to obtain funds from SBA programs created to assist small businesses affected by the COVID-19 pandemic. She said the SBA’s Office of Inspector General continues to focus on identifying and addressing fraud within its programs and will work with law enforcement partners to pursue accountability in such cases.
The complaint filed in Manhattan federal court states that Marymount Manhattan College received a PPP loan of over $6.5 million, most of which had been forgiven before concerns about eligibility arose. Documentation submitted by the college, including records and payroll information, indicated a workforce exceeding 500 employees, contrary to the 482 full-time equivalent employees reported by MMC. The records did not specify that these employees were associated with a single location, a detail relevant under changes introduced by the American Rescue Plan Act in March 2021.
The government became involved in this case by joining the private whistleblower lawsuit filed under the False Claims Act. Assistant U.S. Attorney Mark Osmond, who is handling the case, with support from the SBA’s Office of General Counsel, is overseeing efforts to address the alleged procedural and legal violations by the college. The case highlights the scrutiny applied to institutions managing public funds in the aftermath of the COVID-19 pandemic.
