A group of affiliated companies has agreed to pay $10.8 million to settle allegations of fraudulently obtaining loans under the Paycheck Protection Program (PPP), as announced by Acting United States Attorney Richard G. Frohling for the Eastern District of Wisconsin. The companies involved include Barrington Venture Holding Company LLC, The Club at Strawberry Creek LLC, The Garlands of Barrington LLC, Nuestro Queso, LLC, SSCO LLC, and Tire Profiles LLC.
The PPP was part of the Coronavirus Aid, Relief and Economic Security (CARES) Act, designed to provide financial aid to small businesses impacted by the COVID-19 pandemic. Under this program, eligible businesses could receive loans which would be forgiven if spent on payroll and other eligible expenses. To qualify, businesses needed to certify their eligibility and accuracy of information submitted. Eligibility was restricted to businesses with fewer than 500 employees or those meeting specific industry size criteria.
The settlement addresses allegations against four of these affiliates—The Club at Strawberry Creek LLC, The Garlands of Barrington LLC, Nuestro Queso, LLC, and Tire Profiles LLC—claiming they submitted false certifications to receive PPP loans. These companies allegedly obtained over $5 million in loans while exceeding the employee limit, thus violating eligibility requirements.
According to Acting U.S. Attorney Frohling, “When it passed the Paycheck Protection Program, Congress made policy decisions about what types of businesses would and would not be eligible for the pandemic-relief resources that it made available. Congress decided that it did not want to provide taxpayer dollars to large companies or groups of affiliated companies who likely had access to private sources of capital typically unavailable to American small businesses.” He added that the settlement illustrates the commitment of the Department of Justice and the Small Business Administration to hold accountable businesses that misused the program.
SBA General Counsel Wendell Davis highlighted that the settlement is a product of "enhanced efforts by federal agencies such as the Small Business Administration working with the U.S. Attorney’s Office and other Federal law enforcement agencies to recover the product of this fraud as well as penalties.”
The public is encouraged to report information on potential COVID-19 fraud by contacting the Department of Justice’s National Center for Disaster Fraud Hotline or using the online complaint form. Companies who discover evidence of PPP-related fraud are urged to disclose it to their district’s U.S. Attorney’s Office.
Assistant United States Attorney Aaron R. Wegrzyn, with help from Kandace Zelaya of the Small Business Administration, represented the government in this case. It's important to note that the resolved claims are allegations and do not constitute a determination of liability.
For further inquiries, contact Public Information Officer Kenneth Gales at Kenneth.Gales@usdoj.gov or 414-297-1700.
