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.
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