Del Mar Fairgrounds Agrees to Pay $5.6 Million to Settle Allegations Over Pandemic-Related Loan

SAN DIEGO - The 22nd District Agricultural Association (DAA), which owns and operates the Del Mar Fairgrounds in San Diego County, and Carlene Moore, the chief executive officer of the 22nd DAA, have agreed to pay $5,664,015 to settle allegations that the 22nd DAA was not eligible for the $4,713,700 Paycheck Protection Program loan that it obtained.

The 22nd DAA is governed by a nine-member board, all appointed by the governor of California. The Del Mar Fairgrounds, under the ownership and operation of the 22nd DAA, hosts various public events, including the annual San Diego County Fair and thoroughbred horse racing.

Congress created the Paycheck Protection Program, or PPP, in March 2020, as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, to provide emergency financial support to eligible small businesses experiencing economic hardship caused by the COVID-19 pandemic. Although many small businesses were eligible for forgivable PPP loans, some businesses were not. Regulations provide that businesses ineligible for SBA loans include those considered "government-owned." The United States contends that the 22nd DAA was government-owned and therefore not eligible to receive a PPP loan.

In May 2020, the 22nd DAA obtained a PPP loan in the amount of $4,713,700 based on an application that Carlene Moore, then Deputy General Manager of the 22nd DAA, signed and certified for accuracy of eligibility. The loan was subsequently forgiven based on another application that Ms. Moore also signed and certified for accuracy. The 22nd DAA's loan and forgiveness of the loan resulted in the United States paying $4,713,700 in loan principal plus $97,890 in fees and interest to the bank that processed the loan.

"These loans were intended to provide critical relief to eligible businesses during a time of global crisis," said U.S. Attorney Tara McGrath. "This settlement upholds the integrity of the COVID-relief program and holds the DAA accountable for obtaining millions in taxpayer-funded benefits to which they were not entitled."

SBA's General Counsel Therese Meers stated, "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 the SBA's Office of Inspector General to pursue recovery from those who obtained essential government program funds they weren't eligible for."

This matter was handled by Assistant U.S. Attorney Joseph P. Price Jr.

The claims resolved by the settlement are allegations only, and there has been no determination of liability.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice's National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form