The Strand's $1.5 Million PPP Settlement Is a Warning

The Strand, the New York City bookstore, agreed to pay $1,482,560 to settle civil claims that it took a Paycheck Protection Program loan it was barred from receiving, the U.S. Attorney's Office in Washington, D.C., said on November 3, according to CNBC. The store applied for the $932,350 second-draw loan in February 2021, after Congress had prohibited such loans to businesses in which a member of Congress or a spouse holds a controlling interest. Owner Nancy Bass Wyden is married to Sen. Ron Wyden of Oregon.

The lesson for owners is arithmetic, not politics. The settlement is roughly 59% larger than the loan itself, because the False Claims Act permits recovery beyond the government's actual losses and allows liability based on reckless disregard. A certification signed on a loan application is a legal statement, not paperwork.

The Strand said the error was "unintentional" and that its accountant and the administering bank were unaware the rules had changed between rounds. That defense is plausible and still insufficient: outsourcing a filing does not outsource responsibility for it.

The case also arrived through a qui tam suit filed by Blockquote Inc., which will collect about $148,256. Relief programs closed years ago remain open to private whistleblowers who read eligibility rules closely. U.S. Attorney Jeanine Pirro's office reported no determination of liability by the store.

This story was first reported by CNBC.