The lawsuit, which was filed under seal in the U.S. Northern District of California in 2024, claims the brothers – the wealthiest people in Mississippi – took advantage of a program designed to help small businesses cope with the COVID-19 pandemic.
The lawsuit will move to Mississippi after a federal judge in March granted the Duffs’ motion to transfer the case. The plaintiff in the case is Relator LLC, a limited liability corporation formed, according to the U.S. Department of Justice, by California attorneys Anoush Hakimi and Peter Shahriari.
The Duff brothers, estimated to be worth a combined $7 billion, became the wealthiest people in Mississippi by turning a small, struggling company into Southern Tire Mart, the nation’s largest truck tire dealer and retread manufacturer. They created Duff Capital Investors, the largest privately held business in Mississippi, with ownership in more than 20 companies.
The complaint references that wealth to paint a stark picture, alleging the Duffs “looted the government” by submitting “falsified loan documents” to the Small Business Administration in order to obtain taxpayer-funded payments through the Paycheck Protection Program. Congress created the program in March of 2020 to keep businesses afloat as the global economy shuddered to a halt at the outset of the pandemic.
In court filings, attorneys for Duff have sharply contested the claims, arguing the lawsuit relies on “inflammatory rhetoric” instead of facts. The Duffs’ legal team has also pointed out that the California attorneys have filed similar lawsuits against other individuals, some of which have been dismissed, and argue the lawsuit is the product of trial lawyers looking to capitalize on confusion surrounding pandemic-era government programs.
In a statement to Mississippi Today, Matthew D. Miller, an attorney for the Duffs, said he expected his clients to be “fully vindicated by the judicial process.”
“The PPP loans were lawfully obtained, fully disclosed and reviewed by banks, the SBA and federal attorneys,” Miller wrote. “This case is exactly the kind of parasitic, web-scraped lawsuit that courts have repeatedly rejected from this plaintiff. The allegations were also independently reviewed by the Department of Justice which, after this review, declined to intervene in this lawsuit.”
Thomas Duff, 69, has used his wealth from a tire empire he and his brother created to become a political power broker and philanthropist. He served an eight-year stint on the state Institutions of Higher Learning Board, first appointed by former Gov. Phil Bryant, and has been a major contributor to many Republican campaigns in Mississippi. The tire baron has said he is considering running for governor in 2027, and the lawsuit could unfold as he campaigns for the state’s highest office.
Whistleblower or ‘serial relators?’
The lawsuit, which was filed on Feb. 20, 2024, under the federal False Claims Act, alleges the Duffs and their companies falsely claimed eligibility for PPP loans during the pandemic. The suit was brought by a “relator,” a legal term for a private entity suing as a whistleblower on behalf of the government to recover funds obtained by a defendant accused of defrauding the government.
The Justice Department investigated the allegations made in the complaint and in June of 2025, federal prosecutors declined to intervene. That means federal prosecutors decided against litigating the case themselves, but allowed the private attorneys in California to prosecute the action on behalf of the United States. The case was then unsealed days later.
The Justice Department can decline to intervene for a number of reasons, including a lack of resources or insufficient evidence in the case. In a June 13 court filing, federal prosecutors asked that if either side proposes the lawsuit be dismissed, settled, or otherwise discontinued, the court provide the Justice Department with “notice and an opportunity to be heard before ruling.”
In this case, the relator is called, fittingly, “Relator LLC.” Court records and settlement agreements show the entity has filed several similar lawsuits, with mixed results. For example, it secured a multi-million dollar settlement against a dental services company, while a federal judge threw out its suit against a ritzy golf club.
According to an analysis of these sorts of cases by the law firm Crowell & Moring LLP, a group of “serial relators” including Relator LLC have relied on publicly available PPP data published by the Small Business Administration to file a deluge of lawsuits. The suits allege that borrowers have violated the False Claims Act by seeking PPP loans for which they were ineligible.
Hecht Partners, a New York-based commercial litigation firm representing Relator LLC in its lawsuit against the Duffs, did not respond to messages seeking additional comment about its client’s multiple lawsuits against those alleged to have committed PPP fraud in recent years.
Plaintiffs say the Duffs ‘simply took advantage’
More than $4 billion in PPP loans flowed to Mississippi after Congress approved the federal support program for businesses, with the goal of preventing mass layoffs amid a widespread economic shutdown. Over 79,000 businesses in the state were approved for PPP loans, with disbursements ranging from from $100 to $10 million.
The Duffs applied for loans under the program, and some of their businesses received a total of over $6.7 million, according to court records. The companies should never have received the money, Relator LLC contends, because the Duffs had access to substantial money through their multi-billion dollar conglomerate.
“They are the two richest people in the state of Mississippi,” the lawsuit reads. “They own Duff Capital Investors LLC, which is their very own well-financed investment firm with access to significant capital. There was no need for the loans, and certainly no need to get money from the U.S. government as opposed to their own corporate coffers.”
The lawsuit further alleges the Duffs’ companies were far too large to qualify for relief, calling one reported employee count “a totally fabricated figure” and describing its economic-need certification as “a massive lie.”
Southern Tire Mart, the center of the Duffs’ business portfolio, underreported its headcount, claiming to have 496 employees in order to stay below the 500 threshold to remain eligible for the relief funds, the lawsuit claims. Some estimates say Southern Tire Mart has upwards of 10,000 employees.
Relator LLC also maintains the Duffs’ businesses were financially successful during the pandemic and could have shifted capital around through their parent company or investors to shore up any losses they might have suffered during the pandemic.
After receiving the PPP loans, the Duffs “doubled down on their misappropriation by seeking loan forgiveness” for a program they were never eligible for in the first place, the lawsuit claims.
“This is a glaring example of two wealthy billionaires taking advantage of the system,” the complaint reads.
Duffs say the lawsuit is ‘groundless’
In subsequent court filings, the Duffs’ legal team rejected all the allegations made in the complaint and said their clients obtained the loans lawfully for the purpose of keeping “hard-working people employed and paid.”
In response to the allegation that the Duffs fabricated their employee headcounts, their attorneys argue the lawsuit misstates the rules for obtaining PPP loans. The companies that received loans – including Southern Tire Mart and two auto dealerships – qualified as franchisees, the attorneys say, which made them eligible for loans even if the broader Duff business network employed thousands.
“Relator LLC argues that defendants were ineligible for the loans but never mentions a statute that specifically authorized the loans to the recipients, as ‘franchisees,’” the Duffs’ attorneys write. “The complaint is full of vague and speculative claims that do not plausibly allege wrongdoing.”
The Duffs’ legal team also argues that regardless of the financial resources the brothers had, the federal government tied eligibility for the loans only to “economic uncertainty,” a condition the Southern Tire Mart clearly faced in the early days of the pandemic, they added.
Lawsuit could stretch into governor’s race
Court filings indicate both sides are gearing up for a protracted legal fight. In addition to Miller, the Duffs have retained Joseph Tartakovsky, a San Francisco-based attorney who is the former deputy solicitor general of Nevada. Tartakovsky filed paperwork on Monday seeking permission to represent the Duffs in the U.S. Southern District of Mississippi.
District Judge Kristi H. Johnson, who was appointed by President Donald Trump in 2020, has been assigned the case. She could dismiss the case in a matter of months, but if she declines to do that, legal proceedings could stretch well into the 2027 governor’s race.
Agriculture Commissioner Andy Gipson has already entered the Republican primary for governor, and former House Speaker Philip Gunn is expected to do the same next week.
Duff has stopped short of formally announcing a run for governor in 2027, but he has said publicly he is considering entering the race, pitching himself as an outsider businessman who rose to prominence with no experience holding elected office.
Editor’s note: Mississippi Today received a Paycheck Protection Program loan in 2020.
