Campbell Sales Group Agrees to Pay Nearly $1.5 Million in Restitution and Penalties for COVID-19 Loan Scheme
Summary
Campbell Sales Group, Inc., d/b/a LeatherItaliaUSA, a leather furniture supplier headquartered in Leland, North Carolina, agreed to pay $1,499,164 in restitution and penalties to resolve its criminal liabilities in connection with a Paycheck Protection Program loan, the U.S. Attorney's Office for the Eastern District of North Carolina announced on April 9, 2025. The company admitted that after receiving a $257,700 PPP loan in April 2020 it added people to the payroll who did not work for it and inflated other employees' wages to qualify for forgiveness; the full balance was forgiven in May 2021. It used the same false wage information in a request for a second PPP loan of $213,006 in March 2021. The settlement includes a three-year prosecution deferral period and was accepted by U.S. District Judge Louise W. Flanagan in Case No. 7:25-CR-14-FL.
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Press Release Campbell Sales Group Agrees to Pay Nearly $1.5 Million in Restitution and Penalties for COVID-19 Loan Scheme Wednesday, April 9, 2025 For Immediate Release U.S. Attorney's Office, Eastern District of North Carolina NEW BERN, N.C. – Campbell Sales Group, Inc., d/b/a LeatherItaliaUSA (CSG) has agreed to pay $1,499,164 in restitution and penalties and to undertake additional responsibilities to resolve its criminal liabilities in connection with a Paycheck Protection Program (PPP) loan scheme. Congress created the PPP in March 2020 as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act in order to mitigate the economic impacts of the COVID-19 pandemic for small businesses. PPP loans were fully guaranteed by the United States and forgivable so long as the proceeds were used for payroll and other authorized expenses. In order to obtain forgiveness of the full PPP loan balance, the borrower was required to spend, and attest to spending, at least 60 percent of the loan proceeds on eligible payroll costs during the covered period. CSG is a leather furniture supplier headquartered in Leland, North Carolina. In April 2020, CSG applied for and received a $257,700 PPP loan. As part of the criminal settlement, CSG admitted that after receiving the loan proceeds, it fraudulently increased its payroll in order to meet eligibility requirements for PPP loan forgiveness. Specifically, CSG admitted that it added multiple individuals to the payroll and claimed to have paid them wages, when in fact none of the individuals worked for CSG nor did they receive any wages. CSG further admitted that in addition to the payment of the “ghost wages,” it artificially inflated its payroll by increasing the wages of multiple CSG employees, but the wage payments were not retained by the employees. CSG also admitted that in October 2020, it submitted a PPP loan forgiveness application, in which it provided a payroll cost figure that included the “ghost wages” and the fraudulently inflated wages. During the application review process, CSG provided false supporting documentation to the lender and made additional false representations. The full balance of the $257,700 PPP loan was subsequently forgiven in May 2021. In March 2021, CSG applied for an additional PPP loan totaling $213,006. CSG admitted that it incorporated the same false wage information that it used to obtain forgiveness of its first PPP loan in the second PPP loan request. As part of the criminal settlement, CSG has agreed to pay $1,499,164 in restitution and penalties and be subject to a three-year prosecution deferral period in which it may not commit any further offenses, among other terms. Daniel P. Bubar, Acting U.S. Attorney for the Eastern District of North Carolina, made the announcement after the settlement was accepted by U.S. District Judge Louise W. Flanagan. The United States Secret Service investigated the case and Assistant U.S. Attorney Adam F. Hulbig prosecuted the case. Related court documents and information can be found on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for Case No. 7:25-CR-14-FL. ### Updated April 9, 2025 Component USAO - North Carolina, Eastern
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