Bleistahl North America LP to Pay Over $2.3 Million to Resolve Allegations It Received Paycheck Protection Program Loan

Summary

A press release from USAO - Michigan, Western, published July 3, 2025, announcing that Bleistahl North America LP (Bleistahl), a Battle Creek manufacturer, has agreed to pay a principal amount of $2,355,832.05 to resolve allegations that it violated the False Claims Act by falsely obtaining a second-draw Paycheck Protection Program (PPP) loan for which it was ineligible. The United States alleges that Bleistahl was ineligible for the $1,300,305 loan because the company and its affiliates had over 300 employees. The release gives the qui tam case caption as U.S. ex rel. GNGH2 Inc. v. Bleistahl North America LP, No. 1:24-cv-476 (W.D. Mich.), and states that the claims resolved by the settlement are allegations only.

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Full text

GRAND RAPIDS – Battle Creek manufacturer, Bleistahl North America LP (Bleistahl), has agreed to pay a principal amount of $2,355,832.05 to resolve allegations that it violated the False Claims Act by falsely obtaining a second-draw Paycheck Protection Program (PPP) loan for which it was ineligible. The settlement amount and payment structure were negotiated based on Bleistahl’s ability to pay.
The PPP was an emergency loan program established by the Coronavirus Aid, Relief and Economic Security (CARES) Act in March of 2020 and expanded by the American Rescue Plan Act (ARPA) in 2021. Under the PPP, eligible businesses could obtain loans to cover payroll costs or other specified business expenses. PPP loans were guaranteed by the Small Business Administration (SBA) and subject to forgiveness if spent on eligible expenses. However, PPP loans were only available to a subset of businesses that met the eligibility criteria. As one condition to second-draw loan eligibility, the applicant company and its affiliates must have had no more than 300 employees collectively. When applying for PPP loans, borrowers were required to certify the truthfulness and accuracy of all information provided in their loan applications, including regarding their size, number of employees, and affiliate entities.
In March of 2021, Bleistahl applied for and received a second-draw PPP loan of $1,300,305, which SBA subsequently forgave. The United States alleges that Bleistahl was ineligible for this loan because the company and its affiliates had over 300 employees. The United States also alleges that Bleistahl falsely certified in its PPP loan application that it had fewer than 300 employees, including affiliates.
“Businesses who did not meet the size standard were not entitled to Paycheck Protection Program funding,” said Acting U.S. Attorney Alexis Sanford. “My office will continue to pursue those who falsely obtained PPP loans, fight fraud, and recover funds.”
“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, other federal law enforcement agencies, as well as financial institutions or private individuals who uncover misconduct to recover the lending program’s damages,” said SBA General Counsel Wendell Davis.
The civil settlement includes the resolution of claims brought under the
qui tam
or whistleblower provisions of the False Claims Act against Bleistahl. Under the
qui tam
provisions of the False Claims Act, a private party can file an action on behalf of the United States and receive a portion of the settlement or judgment. Here, the United States elected to take over the case, investigated it, and negotiated the settlement. The
qui tam
case is captioned
U.S. ex rel. GNGH2 Inc. v. Bleistahl North America LP,
No. 1:24-cv-476 (W.D. Mich.).
The resolution obtained in this matter was the result of a coordinated effort between the U.S. Attorney’s Office for the Western District of Michigan and the SBA.
Assistant United States Attorney Whitney M. Schnurr investigated this case alongside Attorney Advisor David Derrico from the SBA.
The claims resolved by the settlement are allegations only and there has been no determination of liability.
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