Topy America, Inc., a steel wheel manufacturer based in Frankfort, Kentucky, has agreed to pay the United States $3,840,188.19 to resolve allegations of improperly obtaining a Paycheck Protection Program (PPP) loan from the U.S. Small Business Administration (SBA). The company was accused of falsely certifying eligibility for a second-draw PPP loan.
The PPP was established by Congress in March 2020 to aid small American businesses during the COVID-19 pandemic. These loans were intended for eligible small businesses and included forgiveness options if certain criteria were met. Topy America applied for a second-draw PPP loan in January 2021, claiming it had fewer than 300 employees. However, the government alleged that including its foreign affiliates, Topy America exceeded this employee limit and was therefore not eligible for the loan.
Acting U.S. Attorney Paul McCaffrey stated, "Our office is committed to holding accountable businesses and individuals who improperly obtained COVID-19 relief funds." He also acknowledged that Topy America "quickly and responsibly addressed the concerns raised by the United States."
The resolution includes lawsuits filed under the qui tam provisions of the False Claims Act by private citizens who can bring fraud allegations to government attention and potentially share in financial recovery. The civil cases involved are captioned as United States ex rel. GNGH2 Inc. v. Topy America, Inc., Case No. 3:24-cv-0003-GFVT and United States ex rel. Blockquote, Inc. v. Topy America, Inc., Case No. 3:24-cv-0028.
Assistant U.S. Attorney Meghan Stubblebine handled this matter with support from the SBA’s Office of General Counsel. It is important to note that these claims are allegations only; there has been no determination of liability.
Anyone with information on potential COVID-19-related fraud is encouraged to report it through appropriate channels provided by the Department of Justice.
