Trax Retail, Inc. Agrees to Pay $3 Million to Resolve Allegations of PPP Loan Fraud
- Issuer
- U.S. Attorney’s Office, District of Massachusetts
- Document type
- Press release
- Date
- 2026-09-17
Press release — Trax Retail, Inc. Agrees to Pay $3 Million to Resolve Allegations of PPP Loan Fraud, dated 2026-09-17, issued by U.S. Attorney’s Office, District of Massachusetts.
Full text
BOSTON – Trax Retail, Inc. (Trax) has agreed to pay approximately $3 million to resolve False Claims Act allegations that the company falsely certified to the United States Small Business Administration (SBA) its eligibility for a Paycheck Protection Program (PPP) loan. As detailed in the settlement agreement , Trax admits that, in February 2021, it obtained a second draw PPP loan and certified that it was eligible to receive the loan under the PPP rules. When it applied for the loan and when it applied for forgiveness, Trax, together with its foreign parent company and affiliates, had over 300 employees. Businesses with more than 300 employees were not eligible for second draw loans. Congress enacted the Coronavirus Aid, Relief, and the Economic Security Act (CARES Act) on March 29, 2020, to provide emergency financial assistance to the millions of Americans who were suffering the economic effects of the COVID-19 pandemic. The CARES Act authorized forgivable loans to small businesses for job retention and certain approved expenses through the PPP, which the SBA administered. On May 5, 2020, the SBA issued guidance that explained that, for purposes of meeting size eligibility requirements (i.e. whether the applicant is a “small business concern” or otherwise falls below the cap on employee headcount), an applicant must count all its employees and the employees of its U.S. and foreign affiliates, absent a waiver of, or an exception to, the affiliation rules. The claims resolved in today’s settlement include claims that were brought under the qui tam or whistleblower provisions of the False Claims Act. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. As part of today’s resolution, the whistleblower will receive approximately $300,000. The settlement credits Trax for cooperation under the Department of Justice’s Guidelines for Taking Voluntary Disclosure, Cooperation and Remediation into Account in False Claims Act Matters. United States Attorney Leah B. Foley and the Small Businesses Administration made the announcement today. Assistant U.S. Attorney Alexandra Brazier of the Affirmative Civil Enforcement Unit handled the case.
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