Persico USA Agrees to Pay $1.46 Million to Resolve False Claims Act Allegations Relating to Paycheck Protection Program Loans

Summary

First Assistant U.S. Attorney Julianne E. Murray announced that Persico USA, Inc. (Persico) agreed to pay more than $1.4 million to resolve allegations that it improperly obtained a Paycheck Protection Program (PPP) loan from the U.S. Small Business Administration for which it was not eligible. The United States contends that Persico obtained a PPP loan that exceeded the size requirements for a second draw PPP loan, because Persico, together with its foreign affiliates, had over 300 employees. The civil settlement includes the resolution of qui tam claims in United States ex rel. Verity Investigations, LLC v. Persico USA, Inc., and the relator will receive a share. The claims resolved by the settlement are allegations only; there has been no determination of liability.

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Persico USA Agrees to Pay $1.46 Million to Resolve False Claims Act Allegations Relating to Paycheck Protection Program Loans
Wilmington, Delaware – First Assistant U.S. Attorney Julianne E. Murray announced today that Persico USA, Inc. (“Persico”) agreed to pay more than $1.4 million to resolve allegations that it improperly obtained a Paycheck Protection Program (“PPP”) loan from the U.S. Small Business Administration (“SBA”) for which it was not eligible.
PPP was an emergency loan program established by Congress in March 2020 under the Coronavirus Aid, Relief and Economic Security (“CARES”) Act and administered by the SBA.  It was created to support small businesses and ensure that they could continue to pay employees and meet other business expenses during the COVID-19 pandemic. Whether an applicant qualified as a small business was determined, in part, by assessing the number of employees of the business, including any domestic and foreign affiliates.  In early 2021, Congress authorized a second tranche of loans, known as second draw loans, that were available to certain small businesses that had already obtained a first draw loan.
Persico is a subsidiary of a multinational entity that manufactures and sells equipment for the automotive, rotomoulding, marine, and medical industries.  The United States contends that Persico obtained a PPP loan that it was not eligible for because it exceeded the size requirements for a second draw PPP loan. Specifically, Persico was ineligible for the PPP loan because it, together with its foreign affiliates, had over 300 employees.
“PPP was designed keep small businesses afloat during the COVID-19 pandemic,” said First Assistant U.S. Attorney Murray.  “Multinational companies that obtained loans for which they did not qualify deprived small businesses of funding intended to keep American workers employed.  Our office will continue to investigate and aggressively pursue any instances of fraud or misconduct within the Paycheck Protection Program.”
The
civil settlement
includes the resolution of claims brought under the
qui tam
or whistleblower provisions of the False Claims Act.  Under those provisions, a private party—known as a relator—can file an action on behalf of the United States and receive a portion of any recovery.  The
qui tam
case is captioned
United States ex rel. Verity Investigations, LLC v. Persico USA, Inc.
, 25-cv-260-CFC (D. Del.).  The relator will receive a share of the settlement.
This matter was handled by Assistant U.S. Attorney William E. LaRosa.
Individuals with information about allegations of fraud involving COVID-19 are encouraged to report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at:
https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form
.
The claims resolved by the settlement are allegations only.  There has been no determination of liability.
executed_persico_agreement_0.pdf

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