A Virginia Beach company has agreed to pay $750,000 to settle allegations that it shouldn’t have received federal pandemic relief loans under the Paycheck Protection Program (PPP).
Both Management Services, Inc. was accused of falsely claiming it was eligible for two rounds of PPP loans—money meant to help small businesses keep workers on payroll during the height of the COVID-19 crisis. According to federal prosecutors, the company misrepresented how many people it employed and failed to count employees of affiliated businesses, which would have made it ineligible.
The issue came to light after a whistleblower filed a lawsuit under the False Claims Act, kicking off a federal investigation. The case, United States ex rel. Verity Investigation, LLC v. Both Management Services, Inc., focused specifically on the company’s second PPP loan.
At the center of the allegations is how the Small Business Administration determined eligibility. PPP rules required businesses to have fewer than 500 employees—or meet certain industry-specific thresholds. But the SBA’s “affiliation rules” made it clear that companies under common ownership or control had to count all affiliated employees together. Prosecutors say Both Management Services left those numbers out when applying for the loans.
The settlement does not mean the company admitted wrongdoing, but it does resolve the allegations. The case was handled by Assistant U.S. Attorney John E. Beerbower in coordination with the SBA.
The federal government has recovered billions tied to PPP fraud since the program launched in 2020. This case adds another chapter to the ongoing effort to crack down on pandemic-era fraud.