Settlement Agreement among the United States of America, Aquatherm, L.P., and Verity Investigations, LLC
Summary
A False Claims Act settlement among the United States, on behalf of the SBA, Aquatherm, L.P. and Verity Investigations, LLC, which filed the qui tam case, Civil Action No. 25-1205-CFC in the District of Delaware, on or about September 29, 2025. Aquatherm, a polypropylene piping maker based in Lindon, Utah and 99% owned by a German company, obtained a Second Draw PPP loan of $864,982 that was later forgiven. The United States contends Aquatherm falsely certified that it and its affiliates had fewer than 300 employees, and in the attached Statement of Facts Aquatherm admits it had more than 300 at all relevant times. Aquatherm agrees to pay $1,351,575.84, of which $901,050.56 is restitution, and the relator receives $135,157.58. The agreement is not an admission of liability.
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- 2026-09-25
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Full text
SETTLEMENT AGREEMENT
This Settlement Agreement (“Agreement”) is entered into among the
United States of America, acting through the United States Department of
Justice and on behalf of the United States Small Business Administration
(collectively the “United States”), Aquatherm, L.P., and Verity Investigations,
LLC (all hereafter collectively referred to as “the Parties”), through their
authorized representatives.
RECITALS
A. Aquatherm, L.P. (“Aquatherm”) is a Delaware limited
partnership with its principal place of business in Lindon, Utah. Aquatherm
manufactures polypropylene piping systems for pressurized mechanical and
plumbing systems.
B. In early 2020, as part of the Coronavirus Aid, Relief, and
Economic Security Act (“CARES Act”), Congress created the Paycheck
Protection Program (“PPP”), a loan program that was administered by the
United States Small Business Administration (“SBA”). In early 2021, SBA
authorized a second series of PPP loans, generally referred to as “Second Draw”
PPP loans.
C. On or about September 29, 2025, Verity Investigations, LLC
(“Relator”) filed a qui tam action in the United States District Court for the
District of Delaware captioned United States ex rel. Verity Investigations, LLC
v. Aquatherm, L.P., Civil Action No. 25-1205-CFC, pursuant to the qui tam
provisions of the False Claims Act, 31 U.S.C. § 3730(b) (the “Civil Action”).
D. The United States contends that it has certain civil claims
against Aquatherm arising from Aquatherm’s application for a Second Draw
PPP loan (the “Second Draw Loan”) on or about March 27, 2021, and SBA’s
forgiveness of that loan on or about July 12, 2022. That conduct is referred to
below as the Covered Conduct.
E. Specifically, the United States contends that, on its application
for the Second Draw Loan and its forgiveness application for the Second Draw
Loan, Aquatherm falsely certified that it, together with its domestic and
foreign affiliates, had fewer than 300 employees, which was a requirement to
be eligible for the loan and for forgiveness of the loan
F. This Settlement Agreement is neither an admission of liability by
Aquatherm nor a concession by the United States that its claims are not well
founded.
G. Aquatherm admits the undisputed facts set forth in the attached
Statement of Facts.
H. Relator claims entitlement under 31 U.S.C. § 3730(d) to a share
of the proceeds of this Settlement Agreement and to Relator’s reasonable
expenses, attorneys’ fees and costs.
To avoid the delay, uncertainty, inconvenience, and expense of
protracted litigation of the above claims, and in consideration of the mutual
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promises and obligations of this Settlement Agreement, the Parties agree and
covenant as follows:
TERMS AND CONDITIONS
1. Aquatherm shall pay to the United States one million three
hundred fifty-one thousand, five hundred seventy-five dollars and eighty-four
cents ($1,351,575.84) (the “Settlement Amount”), of which $901,050.56 is
restitution, by electronic funds transfer, pursuant to written instructions to be
provided by the Office of the United States Attorney for the District of
Delaware, no later than 30 days after the Effective Date of this Agreement.
2. Conditioned upon the United States receiving the Settlement
Amount from Aquatherm and as soon as feasible after receipt, the United
States shall pay $135,157.58 to Relator by electronic funds transfer (“Relator’s
Share”).
3. No later than 30 days after the Effective Date of this Agreement,
Aquatherm will pay to Relator four thousand, five hundred twelve dollars and
fifty cents ($4,512.50) for expenses, attorneys’ fees, and costs pursuant to 31
U.S.C. § 3730(d). Aquatherm and Relator agree that this amount represents
reasonable expenses, attorney’s fees, and costs for the Civil Action
4. Subject to the exceptions in Paragraph 6 (concerning reserved
claims) below, and upon the United States’ receipt of the Settlement Amount,
the United States releases Aquatherm from any civil or administrative
monetary claim the United States has for the Covered Conduct under the False
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Claims Act, 31 U.S.C. §§ 3729–3733; the Program Fraud Civil Remedies Act,
31 U.S.C. §§ 3801–3812; or the common law theories of breach of contract,
payment by mistake, unjust enrichment, and fraud.
5. Subject to the exceptions in Paragraph 6 (concerning reserved
claims) below, and upon the United States’ receipt of the Settlement Amount,
Relator, for itself and for its members, successors, attorneys, agents, and
assigns, releases Aquatherm from any civil monetary claim the Relator has on
behalf of the United States for the Covered Conduct under the False Claims
Act, 31 U.S.C. §§ 3729–3733.
6. Notwithstanding the releases given in Paragraph 4 of this
Agreement, or any other term of this Agreement, the following claims and
rights of the United States are specifically reserved and are not released:
a. Any liability arising under Title 26, U.S. Code (Internal
Revenue Code);
b. Any criminal liability;
c. Except as explicitly stated in this Agreement, any
administrative liability or enforcement right, or any
administrative remedy, including the suspension and
debarment rights of any federal agency;
d. Any liability to the United States (or its agencies) for any
conduct other than the Covered Conduct;
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e. Any liability based upon obligations created by this
Agreement;
f. Any liability of individuals.
7. Relator and its members, successors, attorneys, agents, and
assigns shall not object to this Agreement but agree and confirm that this
Agreement is fair, adequate, and reasonable under all the circumstances,
pursuant to 31 U.S.C. § 3730(c)(2)(B). Conditioned upon Relator’s receipt of
the Relator’s Share, Relator and its members, successors, attorneys, agents,
and assigns fully and finally release, waive, and forever discharge the United
States, its agencies, officers, agents, employees, and servants, from any claims
arising from the filing of the Civil Action or under 31 U.S.C. § 3730, and from
any claims to a share of the proceeds of this Agreement and/or the Civil Action.
8. Relator, for itself, and for its members, successors, attorneys,
agents, and assigns, releases Aquatherm, and its officers, agents, and
employees, from any liability to Relator arising from the filing of the Civil
Action, or under 31 U.S.C. § 3730(d) for expenses or attorneys’ fees and costs.
9. Aquatherm waives and shall not assert any defenses it may have
to any criminal prosecution or administrative action relating to the Covered
Conduct that may be based in whole or in part on a contention that, under the
Double Jeopardy Clause in the Fifth Amendment of the Constitution, or under
the Excessive Fines Clause in the Eighth Amendment of the Constitution, this
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Agreement bars a remedy sought in such criminal prosecution or
administrative action.
10. Aquatherm fully and finally releases the United States, its
agencies, officers, agents, employees, and servants, from any claims (including
attorneys’ fees, costs, and expenses of every kind and however denominated)
that it has asserted, could have asserted, or may assert in the future against
the United States, its agencies, officers, agents, employees, and servants,
related to the Covered Conduct or the United States’ investigation or
prosecution thereof.
11. Aquatherm fully and finally releases the Relator from any claims
(including attorneys’ fees, costs, and expenses of every kind and however
denominated) that Aquatherm has asserted, could have asserted, or may
assert in the future against the Relator, related to the Civil Action and the
Relator’s investigation and prosecution thereof.
12. a. Unallowable Costs Defined: All costs (as defined in the
Federal Acquisition Regulation, 48 C.F.R. § 31.205-47) incurred by or on behalf
of Aquatherm, and its present or former partners, officers, directors,
employees, shareholders, and agents in connection with:
(1) the matters covered by this Agreement;
(2) the United States’ civil investigation of the matters
covered by this Agreement;
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(3) Aquatherm’s investigation, defense, and corrective
actions undertaken in response to the United States’
civil investigation in connection with the matters
covered by this Agreement (including attorneys’
fees);
(4) the negotiation and performance of this Agreement;
(5) the payment Aquatherm makes to the United States
pursuant to this Agreement and any payments that
it may make to Relator, including costs and
attorneys’ fees,
are unallowable costs for government contracting purposes (hereinafter
referred to as “Unallowable Costs”).
b. Future Treatment of Unallowable Costs: Unallowable
Costs will be separately determined and accounted for by Aquatherm, and
Aquatherm shall not charge such Unallowable Costs directly or indirectly to
any contract with the United States.
c. Treatment of Unallowable Costs Previously Submitted for
Payment: Within 90 days of the Effective Date of this Agreement, Aquatherm
shall identify and repay by adjustment to future claims for payment or
otherwise any Unallowable Costs included in payments previously sought by
Aquatherm or any of its subsidiaries or affiliates from the United States.
Aquatherm agrees that the United States, at a minimum, shall be entitled to
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recoup from Aquatherm any overpayment plus applicable interest and
penalties as a result of the inclusion of such Unallowable Costs on previously-
submitted requests for payment. The United States, including the
Department of Justice and/or the affected agencies, reserves its rights to audit,
examine, or re-examine Aquatherm’s books and records and to disagree with
any calculations submitted by Aquatherm or any of its subsidiaries or affiliates
regarding any Unallowable Costs included in payments previously sought by
Aquatherm, or the effect of any such Unallowable Costs on the amount of such
payments.
13. This Agreement is intended to be for the benefit of the Parties
only.
14. Upon receipt of the payment described in Paragraph 1, above, the
United States and Relator shall promptly sign and file in the Civil Action a
Joint Stipulation of Dismissal of the Civil Action pursuant to Rule 41(a)(1).
15. Except as provided in Paragraph 3, above, each Party shall bear
its own legal and other costs incurred in connection with this matter, including
the preparation and performance of this Agreement.
16. Each Party and signatory to this Agreement represents that it
freely and voluntarily enters into this Agreement without any degree of duress
or compulsion.
17. This Agreement is governed by the laws of the United States. The
exclusive venue for any dispute relating to this Agreement is the United States
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District Court for the District of Delaware. For purposes of construing this
Agreement, this Agreement shall be deemed to have been drafted by all Parties
to this Agreement and shall not, therefore, be construed against any Party for
that reason in any subsequent dispute.
18. This Agreement constitutes the complete agreement between the
Parties. This Agreement may not be amended except by written consent of the
Parties. Forbearance by the United States from pursuing any remedy or relief
available to it under this Agreement shall not constitute a waiver of rights
under this Agreement.
19. The undersigned counsel represent and warrant that they are
fully authorized to execute this Agreement on behalf of the persons and entities
indicated below.
20. This Agreement may be executed in counterparts, each of which
constitutes an original and all of which constitute one and the same
Agreement.
21. This Agreement is binding on Aquatherm’s successors,
transferees, heirs, and assigns.
22. This Agreement is binding on Relator’s successors, transferees,
heirs, and assigns.
23. All Parties consent to the United States’ disclosure of this
Agreement, and information about this Agreement, to the public.
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24. This Agreement is effective on the date of signature of the last
signatory to the Agreement (the “Effective Date”). Facsimiles of signatures
shall constitute acceptable, binding signatures for purposes of this Agreement.
THE UNITED STATES OF AMERICA
DATED: BY: ______________________________
Dylan J. Steinberg
Civil Chief
Assistant United States Attorney
District of Delaware
AQUATHERM, L.P.
DATED: BY: _____________________________
James Paschal
CEO / President
DATED: BY: _____________________________
Rodney Wilkinson
Counsel for Aquatherm, L.P.
VERITY INVESTIGATIONS, LLC
6/9/2026
DATED: BY: _____________________________
Gregory Lynam
Member, Verity Investigations, LLC
DATED: June 8, 2026 BY: _____________________________
Steven Shepard
Counsel for Verity Investigations, LLC
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STATEMENT OF FACTS
1. Aquatherm, L.P. (“Aquatherm”) is a Delaware limited partnership with its
principal place of business in Lindon, Utah. Aquatherm is 99% owned by
Aquatherm Besitzgesellschaft mbH & Co. KG, a German company.
2. In early 2020, as part of the Coronavirus Aid, Relief, and Economic Security
Act (“CARES Act”), Congress created the Paycheck Protection Program
(“PPP”), a loan program that was administered by the United States Small
Business Administration (“SBA”).
3. In early 2021, SBA authorized a second series of PPP loans, generally referred
to as “Second Draw” PPP loans. To be eligible for a Second Draw loan,
applicants were required to certify that they, together with any of their
domestic and foreign affiliates, had fewer than 300 employees.
4. Aquatherm applied for and obtained a Second Draw PPP loan in the amount
of $864,982. On the Second Draw loan application, Aquatherm certified that
it, together with its affiliates, had fewer than 300 employees. Aquatherm
subsequently applied for (and ultimately received) forgiveness of the Second
Draw loan.
5. At all relevant times, Aquatherm, together with its affiliates, had more than
300 employees.
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