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. The company will pay $1,012,876 to settle claims that it was ineligible for a Small Business Administration Paycheck Protection Program (PPP) loan it received in 2021.
The settlement was announced by First Assistant U.S. Attorney Charles Neil Floyd. Headset is a Seattle data analytics company that does data analysis for marijuana companies.
Federal officials said Headset was ineligible for the PPP loan and loan forgiveness because the marijuana industry is illegal under federal law. The company received the loan in February 2021, and the loan was forgiven in August 2021.
Headset did not admit wrongdoing as part of the agreement. The company chose to resolve the case with monetary payments in order to avoid the risks of litigation.
The civil settlement resolves claims brought under the qui tam, or whistleblower, provisions of the False Claims Act, which allow a private party to file an action on behalf of the United States and receive a portion of any recovery.
In May 2024, Sidesolve LLC filed a qui tam lawsuit against Headset. Sidesolve is a data analytics firm that uses AI to target potential corporate fraud.
The lawsuit alleged that Headset was ineligible for the PPP loan because it worked in the cannabis industry, an industry illegal under federal law. A qui tam lawsuit allows private parties to assist a prosecution in exchange for a share of the damages.
Sidesolve served as the relator in the case. As relator, Sidesolve will receive 10% of the total Headset pays to the government.
Sidesolve will also receive $20,000 for attorney fees and costs. The False Claims Act’s whistleblower provisions made the private party’s role in the case possible.
The case demonstrates how private firms can initiate fraud claims on behalf of the government. The government ultimately recovered funds through the settlement.
Under the terms of the settlement, Headset paid $100,000 within 30 days of signing the settlement in early August. The settlement was signed in early August 2026, according to the KOMO report.
The company will pay the remaining $900,000-plus over four years. Payments will conclude in August 2030.
Headset’s payments will be made to the government over the multi-year period.
The settlement ends the litigation risk the company faced over the PPP loan. Headset continues to operate as a data analytics provider for cannabis businesses.
No admission of wrongdoing was made by the company in resolving the matter.
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