BOSTON — The International Brotherhood of Electrical Workers Local 103 (IBEW Local 103) has agreed to pay $2,033,205 to resolve allegations that it violated the False Claims Act by obtaining a Paycheck Protection Program (PPP) loan before it was eligible to do so.
According to the U.S. Attorney’s Office for the District of Massachusetts, IBEW Local 103 — a Dorchester-based labor union and 501(c)(5) nonprofit — applied for and received a first-round PPP loan in April 2020, months before Congress amended the program to include labor unions. At the time of the loan, such organizations were not eligible under federal law.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act, passed by Congress in March 2020, established the Paycheck Protection Program (PPP) to deliver forgivable loans to small businesses facing financial hardship due to the COVID-19 pandemic.
The office said the union later applied for a second PPP loan in March 2021, when the law was amended to allow unions to participate. On that second application, the union certified it had used all funds from its first loan — a requirement to receive a second one. However, officials allege that had the union waited to apply for the first loan until it was eligible, it would not have exhausted those funds before applying for the second.
“The settlement credits IBEW Local 103 for cooperation under the Department of Justice’s Guidelines for Taking Voluntary Disclosure, Cooperation and Remediation into Account in False Claims Act Matters,” the U.S. Attorney’s Office said in it statement.
The settlement was announced by U.S. Attorney Leah B. Foley and the U.S. Small Business Administration. The matter was handled by Assistant U.S. Attorney Brian M. LaMacchia, Chief of the Affirmative Civil Enforcement Unit.
