By: Richard L. Smith
A Delaware-based company with operations in Fairfield, New Jersey, has agreed to pay nearly $2.9 million to settle allegations that it improperly obtained federal pandemic relief funds, according to a statement released by the U.S. Attorney’s Office.
Senior Counsel Philip Lamparello announced that Protech Powder Coatings, Inc. entered into a settlement with the United States resolving claims that it violated the False Claims Act by applying for and receiving a Paycheck Protection Program (PPP) loan for which it was not eligible.
According to federal officials, Protech Powder, a subsidiary of the Canada-based Protech Group, applied for and received a second-draw PPP loan and loan forgiveness totaling approximately $2.02 million, including interest, between March 2021 and January 2022.
The government contends that the company falsely certified its eligibility for the loan by stating it met program requirements, despite exceeding allowable employee size limits when including its affiliates.
The United States further alleged that Protech Powder knowingly made false statements in its PPP application, which resulted in the government also paying about $60,000 in lender processing fees tied to the ineligible loan.
Under the terms of the settlement, Protech Powder agreed to pay $2,907,643 to the federal government.
The resolution stems from a lawsuit filed under the whistleblower provisions of the False Claims Act.
The individual who brought the case on behalf of the government will receive approximately $290,764 as a share of the recovery.
The PPP was created by Congress in March 2020 to provide emergency financial assistance to businesses impacted by the COVID-19 pandemic.
Loans issued under the program were backed by the Small Business Administration and required applicants to certify their eligibility and the accuracy of the information provided.