Law Firm Secures $1.5 Million Settlement in PPP Loan Fraud Case

The Law Offices of Darth M. Newman, LLC announced a $1.5 million settlement in a case involving misuse of Paycheck Protection Program loans, resolving allegations that Argosy Investment Partners V, L.P., its parallel affiliate, and a portfolio company improperly obtained a second-draw PPP loan exceeding allowable limits under the CARES Act. The settlement, reached in the case formally known as United States ex rel. Zachary Holtzman v. Argosy Capital Company, LLC, et al., was announced on June 5, 2025, and underscores the critical role of whistleblowers in uncovering fraud against the government.

Zachary Holtzman, represented by the Law Offices of Darth M. Newman, brought the allegations to light through a qui tam action under the False Claims Act, which allows private individuals to sue on behalf of the government when they suspect fraud. Darth Newman, Esq., principal attorney at the firm, emphasized that whistleblowers are essential in safeguarding public funds, stating that this successful resolution brings accountability to those who misuse federal relief programs and serves as a deterrent against future fraud. The firm continues its commitment to representing individuals who expose fraud against the government, ensuring compliance with the law and protecting taxpayer interests.

This settlement highlights the legal obligations businesses have when participating in federal relief programs like the PPP, which was established under the CARES Act to provide economic assistance during the COVID-19 pandemic. The case demonstrates the consequences of failing to adhere to program requirements, particularly regarding loan limits and eligibility. By recovering $1.5 million in misused funds, the settlement reaffirms the value of the False Claims Act as a tool for combating fraud and recovering public money. The outcome matters because it reinforces accountability in government spending, protects taxpayer dollars from abuse, and encourages ethical business practices in accessing federal aid.

The implications of this announcement extend beyond the immediate financial recovery, as it signals increased scrutiny of PPP loan compliance and potential legal actions against other entities that may have violated program rules. For more information about the False Claims Act and its provisions, visit https://www.justice.gov/civil/false-claims-act. The case also illustrates how whistleblower protections under laws like the False Claims Act empower individuals to report wrongdoing without fear of retaliation, thereby strengthening oversight of government programs. As federal relief efforts continue in various forms, this settlement serves as a reminder that proper use of public funds is not only a legal requirement but a civic responsibility, with significant penalties for non-compliance.