U.S. Attorney's Office, North Carolina, Western, "Restaurant And Owner Agree To Pay Over $1.5 Million To Settle Allegations Of Pandemic Relief Fund Misuse" (April 14, 2025)

Summary

Press release of April 14, 2025 from the United States Attorney's Office for the Western District of North Carolina, issued from Charlotte, announcing that a restaurant owner and his company, doing business as Hillbilly's Barbeque and Steaks, agreed to pay $1,530,682.26 to resolve False Claims Act allegations that they knowingly obtained $762,903 in pandemic relief funds through an Economic Injury Disaster Loan and two Paycheck Protection Program loans and misused them. The civil complaint alleged that he transferred $100,000 to a personal account labeled Vacation Account, added a friend as account holder to boost the friend's credit score for a separate SBA loan, and then bought a FedEx business outright for $750,000 with two checks of $400,000 and $350,000 from the restaurant's account. The release notes that the claims resolved are allegations only.

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Full text

CHARLOTTE, N.C. – U.S. Attorney Russ Ferguson announced today that Bobby Gerald Duncan (“Duncan”) and DE & E Foods, Inc. d/b/a Hillbilly’s Barbeque and Steaks (“Hillbilly’s BBQ”) have agreed to pay $1,530,682.26 to resolve allegations that they violated the False Claims Act by knowingly obtaining $762,903 in pandemic relief funds, and then misusing those funds for Duncan’s own personal gain. The settlement further resolves allegations that Duncan and Hillbilly’s BBQ knowingly made false statements to obtain the relief funds, as well as obtain loan forgiveness of the Paycheck Protection Program (“PPP”) portion of the funds.

The United States civil complaint alleged that Duncan, through his restaurant Hillbilly’s BBQ, obtained the relief funds through an Economic Injury Disaster Loan (“EIDL”) and two PPP loans. Rather than using the funds for authorized purposes, including for payroll and other business-related expenses, Duncan misappropriated the funds for his own benefit, specifically to purchase a separate FedEx business with Duncan’s longtime friend.

Duncan did so by first transferring $100,000 of the relief funds from a Hillbilly’s BBQ corporate account to a personal account entitled “Vacation Account,” and then adding his friend as an account holder to artificially boost the friend's credit score for a separate SBA loan intended for the FedEx business purchase. When that failed, Duncan used the pandemic relief funds to buy the FedEx business outright for $750,000, by writing two large checks for its purchase directly from the Hillbilly’s BBQ business account (one for $400,000 and another for $350,000).

“Pandemic relief funds were meant to provide a financial lifeline to small businesses struggling to stay afloat during the unprecedented COVID crisis,” said U.S. Attorney Ferguson. “Where those funds were misused, we will pursue their return as part of our ongoing effort to curb waste, fraud, and abuse of taxpayer money.”

Assistant U.S. Attorney Seth Johnson of the U.S. Attorney’s Office in Charlotte is in charge of this case.

The claims resolved by the settlement are allegations only. There has been no determination of liability.

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