Lackawanna company to pay $1.5 million to resolve False Claims Act allegations related to improper receipt of PPP funds
Summary
In a release datelined Buffalo, N.Y., U.S. Attorney Michael DiGiacomo announced that Welded Tube USA, Inc. agreed to pay $1,500,000 to resolve allegations that it improperly obtained a Paycheck Protection Program loan it was not eligible to receive. The United States contends that in 2021, when Welded Tube obtained a second draw PPP loan that was later forgiven, it was a wholly owned subsidiary of Welded Tube of Canada Corp., and that the Canadian company and its affiliates collectively had over 300 employees, above the general limit of 300 or fewer employees for second draw loans. The release states that the claims resolved by the settlement are allegations only and that there has been no determination or admission of liability. DiGiacomo is quoted as saying the office recovered over $10 million during the 2026 fiscal year related to PPP fraud.
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BUFFALO, N.Y. – U.S. Attorney Michael DiGiacomo announced today that Welded Tube USA, Inc. has agreed to pay $1,500,000 to resolve allegations that it improperly obtained a Paycheck Protection Program (PPP) loan from the U.S. Small Business Administration (SBA), which it was not eligible to receive. This action is part of the Trump Administration’s Task Force to Eliminate Fraud. The PPP loan program, enacted in March 2020, provided emergency financial assistance to small businesses during the COVID-19 pandemic. The program allowed eligible small businesses to receive loans guaranteed by the federal government. Regulations provided various eligibility requirements for the PPP, including limitations on the applicants’ number of employees, including employees of the applicants’ foreign affiliates. Specifically, applicants for second draw PPP loans were required, generally, to have 300 or fewer employees. The United States contends that Welded Tube obtained a forgiven PPP loan that it was not eligible for because it exceeded the size restrictions for a second draw PPP loan. In 2021, when Welded Tube obtained a second draw PPP loan, it was a wholly owned subsidiary of Welded Tube of Canada Corp., a Canadian company. Welded Tube of Canada Corp. and its affiliates collectively had over 300 employees at the time of Welded Tube’s PPP loan. “We continue to work tirelessly to recover taxpayer dollars that were improperly obtained by ineligible entities,” said U.S. Attorney DiGiacomo. “Through our affirmative civil enforcement efforts, we recovered over $10 million during the 2026 fiscal year related to PPP fraud.” On April 7, 2026, the Department of Justice announced the creation of the National Fraud Enforcement Division (Fraud Division). The Fraud Division is laser-focused on investigating and prosecuting those who commit fraud against the American people. The Department’s work to combat fraud supports President Trump’s Task Force to Eliminate Fraud, a whole-of-government effort chaired by Vice President J.D. Vance to eliminate fraud, waste, and abuse within Federal benefit programs. This matter was handled by Assistant U.S. Attorney Jonathan W. Ferris and Investigator Margaret McFarland. The claims resolved by the settlement are allegations only; there has been no determination or admission of liability. Read the settlement agreement here: welded_tube_settlement_agreement.pdf # # # #
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