(The Center Square) – A group of Wisconsin companies reached a settlement to repay nearly $10.9 million after being accused of falsely certifying they were eligible for federal pandemic Payroll Protection Program loans.
The loans were setup for companies that employ 500 or less people, including part-time employees, which included all companies under the umbrella of the same ownership based on the Small Business Administration’s affiliation rules.
The Wisconsin-based group that owns Barrington Venture Holding Company LLC, The Club at Strawberry Creek LLC, The Garlands of Barrington LLC, Nuestro Queso, LLC, SSCO LLC and Tire Profiles LLC applied for and received six loans valued at more than $5 million despite exceeding the 500-employee limit and were thus accused of violating the False Claims Act.
The loans went to The Club at Strawberry Creek LLC, The Garlands of Barrington LLC, Nuestro Queso LLC and Tire Profiles LLC
“When it passed the Paycheck Protection Program, Congress made policy decisions about what types of businesses would and would not be eligible for the pandemic-relief resources that it made available,” said Acting United States Attorney Richard Frohling said in a statement. “Congress decided that it did not want to provide taxpayer dollars to large companies or groups of affiliated companies who likely had access to private sources of capital typically unavailable to American small businesses.
“The eight-figure settlement announced today reflects the continuing commitment of the Department of Justice and the Small Business Administration to hold accountable sophisticated businesses that abused this emergency program.”
If the PPP funds were spent on payroll and eligible expenses, the loans were repaid by the federal government.
“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.
