Think of it as a graduated income tax.
A private Back Bay club for Harvard University alumni has agreed to pay a $2.4 million fine for defrauding a COVID-era assistance program, authorities said.
The Harvard Club of Boston, which is not affiliated with the Ivy League school, has agreed to the fine as part of a settlement deal, US Attorney Leah B. Foley’s office said in a statement.
As part of the deal, the private club admitted that it applied for and obtained a loan in May 2021 through the government’s Paycheck Protection Program, which was created to help businesses during the pandemic. Private clubs were barred from participating in the program, federal prosecutors said.
The club received loan forgiveness from the federal government in 2022, but under the settlement, it agreed to pay $2,472,187, including $1,648,125 in restitution plus interest, records show.
The club declined to comment on the settlement through a spokesperson.
A whistleblower named Daniel Foster drew attention to the matter when he filed court papers last May alleging fraud, records show.
Foster “alleged that the Harvard Club violated the False Claims Act because it submitted a false application for a first-draw PPP loan for which it was not eligible, due to its status as a private club that restricts the number of memberships for reasons other than capacity,” the settlement agreement said.
The club cooperated with the probe, prosecutors noted.
“Among other actions, the Harvard Club produced materials without a subpoena, cooperated with the government’s investigation, disclosed the findings of its internal investigation, and sought to resolve this matter expeditiously,” prosecutors said.
Foster will receive more than $247,000 under a federal whistleblower statute, prosecutors said. Foster’s lawyer will receive $25,000 from the club, they said.
Foster’s attorney didn’t immediately return a request for comment. It wasn’t immediately clear if Foster was a club member or had some other type of relationship with the private organization.
The settlement also described membership criteria for the club.
“The Harvard Club of Boston is a private membership club in Boston that restricts membership to applicants who fit certain eligibility categories, including, for example, individuals who are alumni of Harvard or other select universities,” the settlement said.
On its website, the club says it has “a rich and storied history dating back to its founding in 1908.”
The site says just 22 founding members started the club that year, with $5 annual dues. That’s roughly $176 in today’s economy, a mere pittance for the median Harvard alum.
“Over the decades, it has evolved into a prestigious institution that serves as a hub for Harvard alumni and affiliates in the Boston area,” the site says. “Throughout its history, the Harvard Club of Boston has remained dedicated to fostering connections among its members and promoting the values of Harvard University.”
Sign in to read the full article.
Sign in with Google