While investors may see the as a lifeline for their startup portfolio companies, there are certain traps to be aware of.

Under the False Claims Act, the government can seek both civil and criminal penalties against companies obtaining funding under false pretenses. On top of this, individual whistleblowers (with their hungry plaintiffs’ attorneys) also have standing to .

It’s not just the companies that obtain funding that can be liable. Individuals, including directors, have the potential to become liable, as well.

Stimulus funding requirements

Many popular CARES Act funding programs — like the PPP and EIDL programs — require an applicant company to make eligibility certifications. For example, the PPP loans require a certification that “the uncertainty of current economic conditions makes necessary the loan

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