Stout was engaged as a consulting expert to conduct a thorough review of Paycheck Protection Program (PPP) loan applications submitted by the subject company, along with supporting documentation, to assess compliance with applicable PPP guidance and regulations issued by the U.S. Small Business Administration (SBA).

The scope of work included:

• Reviewing the company’s PPP loan documentation, including loan applications, payroll records, tax filings, and certifications submitted in support of the loan amounts requested
• Analyzing relevant SBA guidance, interim final rules, FAQs, and other regulatory materials to establish a benchmark for determining appropriate eligibility criteria
• Performing detailed testing procedures to evaluate the accuracy and consistency of payroll data used to calculate loan amounts, and to assess whether employees and payroll costs were appropriately claimed

As a result of the review and investigative procedures, it was determined that the borrower claimed the same employees across multiple PPP loan applications — contrary to program rules prohibiting double-counting of payroll expenses — and that payroll expenses for certain employees were overstated, resulting in inflated loan amounts. These findings were included, among other allegations of wrongdoing, in claims for a litigation.