Ozaukee Country Club Agrees to Pay $750,000 to Settle Alleged False Claims Act Violations regarding Paycheck Protection Program Loan

Brad D. Schimel, First Assistant United States Attorney for the Eastern District of Wisconsin, announced a settlement with Ozaukee Country Club, whereby the club has paid $750,000.00 to settle claims that it improperly obtained a loan through the Paycheck Protection Program ("PPP"), administered by the United States Small Business Administration ("SBA").

The PPP loan program, enacted in March 2020, provided emergency financial assistance to Americans suffering from the economic effects of the COVID-19 pandemic. The program allowed eligible small businesses and nonprofits to receive loans guaranteed by the federal government and, if the borrower spent the funds on qualified expenses, the federal government would repay the loan on the borrower's behalf.

Congress directed the SBA to guarantee PPP loans "under the same terms, conditions, and processes" as ordinary small business loans administered by the agency. 15 U.S.C. § 636(a)(36)(B). With respect to loan eligibility, Congress expressly endorsed the SBA's regulation explaining which entities would be ineligible for loans. 15 U.S.C. § 636(a)(37)(A)(iv)(III)(aa). For decades, this regulation has explained that "[p]rivate clubs and businesses which limit the number of memberships for reasons other than capacity" are not eligible for loans through the SBA. 13 C.F.R. § 120.110(i).

Ozaukee Country Club operates a private country club in Mequon, Wisconsin, which is open only to its members. To become a member of Ozaukee Country Club, nominees must be sponsored by current members, undergo various background-check procedures, and be approved by the club's board of directors. Thus, according to the government, at the time Ozaukee Country Club applied for a PPP loan and for loan forgiveness, the club limited its membership for reasons other than capacity and was ineligible to participate in the PPP.

"Although our criminal division receives most of the high-profile attention, the U.S. Attorney's Office also has an outstanding civil division," said First Assistant U.S. Attorney Brad Schimel. "I am very proud of the excellent work our civil division did on this case and countless others to protect the interests of the United States and its citizens."

"The favorable settlement in this case is the product of enhanced efforts by federal agencies such as the Small Business Administration working with the U.S. Attorney's Office and other federal law enforcement agencies to recover the product of this fraud as well as penalties," said SBA General Counsel Wendell Davis.

Assistant United States Attorney Aaron R. Wegrzyn represented the government in connection with this matter, in coordination with Kandace Zelaya in the SBA's Office of Litigation and Office of General Counsel. While the settlement resolves the government's allegations against Ozaukee Country Club with respect to its PPP loan, the club does not admit liability and no court has made any determination as to liability.

In addition, on April 7, 2026, the Department of Justice announced the creation of the National Fraud Enforcement Division ("Fraud Division"). The Fraud Division is investigating and prosecuting those who commit fraud against the American people. The Department's work to combat fraud supports President Trump's Task Force to Eliminate Fraud, a whole-of-government effort chaired by Vice President J.D. Vance to eliminate fraud, waste, and abuse within Federal benefit programs.

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