United States Reaches $2.2 Million Settlement over Pandemic Loan
Summary
Federal press release datelined St. Louis announcing that the United States Attorney's Office for the Eastern District of Missouri finalized a civil settlement under which VSM Abrasives Corp. will repay $2,022,250 over a $2 million Paycheck Protection Program loan it received in 2021 that was later forgiven. U.S. Attorney Thomas C. Albus announced the settlement. The settlement resolves allegations in a qui tam action under the False Claims Act brought by Blockquote Inc. The action alleges that VSM was not eligible because, although it certified a headcount under 300 employees, VSM and its affiliates, including its German parent company, exceeded that limit.
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“United States Reaches $2.2 Million Settlement over Pandemic Loan.”
Original at www.justice.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/doj-usao-edmo-press-release-united-states-reaches-22-million-settlemen-c4754160ce/
, SHA-256 6ebe3395014e449a56aca0838f91992d20bb3a76e96b908dc5887f8cc396fca9.Full text
ST. LOUIS – The United States Attorney’s Office for the Eastern District of Missouri has finalized a civil settlement to resolve allegations that a Missouri manufacturer was not eligible for a $2 million pandemic-era loan, U.S. Attorney Thomas C. Albus announced Thursday. As part of the settlement, VSM Abrasives Corp. will repay $2,022,250 to the United States. The amount represents a $2 million Paycheck Protection Program loan that VSM received in 2021. The loan, which was intended to save jobs and provide relief to small businesses affected by the COVID-19 pandemic, was later forgiven. The settlement resolves allegations brought under the qui tam or whistleblower provisions of the False Claims Act by Blockquote Inc. The qui tam action alleges that VSM was not eligible for the loan because although it certified that its headcount was under 300 employees, VSM and its affiliates, including its German parent company, Vereinigte Schmirgel- und Maschinen-Fabriken AG, employ more than 300. VSM disputes the allegations. The settlement contains no admission of liability. “We appreciate the efforts of Blockquote and other companies that are ferreting out problematic pandemic loans, as well as VSM’s cooperation,” said U.S. Attorney Thomas C. Albus. “This settlement shows our commitment to ensure that government funds are spent appropriately.” This civil settlement was a result of the combined work of the U.S. Attorney’s Office for the Eastern District of Missouri and the U.S. Small Business Administration. The qui tam case is captioned United States ex rel. Blockquote Inc. v. VSM Abrasives Corp., Case No. 4:24-cv-00805 in U.S. District Court in St. Louis. Under those provisions, a private party can file a civil action on behalf of the United States, thereby bringing allegations of fraud to the Government’s attention, and share in any financial recovery. Blockquote will receive $224,694 from the settlement and Blockchain’s attorneys will receive $20,000.
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