Cannabis Analytics Firm Agrees to Pay Over $1M to Settle Claims It Improperly Received COVID-19 Relief Loan
- Cannabis analytics firm Headset Inc. agreed to pay over $1 million to settle claims that it improperly received a federal COVID-19 PPP loan in 2021.
- In May 2024, Sidesolve LLC filed a qui tam lawsuit against Headset, alleging ineligibility for the PPP loan due to its involvement in the federally illegal cannabis industry.
- Sidesolve will receive 10% of Headset’s settlement payment plus $20,000 for attorney fees and costs as the relator in the case.
- Headset paid $100,000 upfront and will pay the remaining balance over four years, finishing in August 2030, while not admitting any wrongdoing.
Cannabis analytics firm Headset Inc. has agreed to pay more than $1 million to resolve allegations that it improperly received a federal COVID-19 relief loan. Headset agreed to pay $1,012,876 to settle the claim that it was ineligible for a Small Business Administration Paycheck Protection Program (PPP) loan in 2021.
In May 2024, Sidesolve LLC, a data analytics firm that uses AI to target potential corporate fraud, filed a qui tam lawsuit – which allows private parties to assist a prosecution in exchange for a share of the damages – against Headset, claiming that it was ineligible for a PPP loan because it worked in the cannabis industry, an industry illegal under federal law.
Sidesolve, as the relator in the case, will receive 10% of the total Headset pays to the government, as well as $20,000 for attorney fees and costs.
Under the terms of the settlement, Headset paid $100,000 within 30 days of signing the settlement in early August and will pay the remaining balance over four years, concluding in August 2030.
Headset did not admit wrongdoing, but in order to avoid litigation, chose to resolve the case with the monetary payments.