Pine Mountain Lake Association Reaches Settlement Over PPP Loans
Groveland, CA — The Pine Mountain Lake Association has faced some legal challenges after it unlawfully accepted Paycheck Protection Program loan dollars available during the COVID pandemic.
The homeowner’s association has sent out a letter to its members that a lawsuit was brought forward on behalf of the federal government alleging that it violated the False Claims Act by improperly applying for and receiving hundreds of thousands of dollars in available PPP money.
The association oversees things like the 18-hole golf course, restaurant, stables, and campground.
In the letter, the association argues that PPP was implemented in a “chaotic” and “confusing” manner with information changing daily. The legal complaint surrounds it being a 501 ©(4) entity, a form of non-profit ineligible for the federal loans. It is something the association says it failed to realize when it applied for and received the money.
The association did not note how much money was received, but says, “False Claims Act does carry significant risk, and jury results are unpredictable. Had PMLA litigated the case and lost, it stood to lose well over $5 million, and would have spent an estimated $500,000 in legal fees. In the end, the PMLA decided that the risk of litigation and potential loss outweighed the very favorable settlement offered by the United States. We have authorized the repayment of the PPP loans by borrowing from the Association reserve fund. A repayment plan has been prepared and the PMLA reserve fund will be repaid back over time in 2024. At this time, the Association does not anticipate the need to levy a special assessment to repay the reserve fund.”
The letter indicates that the settlement agreed upon is around $500,000.
It will be further discussed at a Town Hall meeting the association is hosting on Saturday (January 6) at the Lake Lodge from 10 am – noon. It will also be discussed at the next PMLA Board of Directors meeting on January 20.
