Leigha Simonton, United States Attorney, Northern District of Texas | U.S. Attorney's Office for the Northern District of Texas
SW North America, Inc., a machining and automation supplier, has agreed to pay over $1.5 million to resolve accusations of violating the False Claims Act. The company allegedly misrepresented its eligibility when applying for a Paycheck Protection Program (PPP) loan during the COVID-19 pandemic. The announcement came from Acting United States Attorney for the Northern District of Texas, Chad E. Meacham.
The PPP, established in March 2020 as part of the CARES Act, offered emergency loans to small businesses facing economic difficulties due to the pandemic. The eligibility for these loans was determined by factors such as employee count. Nevertheless, it was alleged that SW North America, together with its affiliates, exceeded these employee-count standards when it secured a PPP loan of $1,204,400 in 2021. This loan was later fully forgiven.
Acting United States Attorney Chad E. Meacham said, "PPP loans were intended, first and foremost, to help eligible small businesses during the COVID-19 pandemic. This office will continue to aggressively pursue loan recipients who were not eligible to obtain taxpayer funds, whether due to their size or for any other reason."
The settlement terms are related to a qui tam lawsuit filed under the False Claims Act. This provision allows private parties to file lawsuits on behalf of the United States and receive a share of any government recovery. In this case, GNGH2 Inc., the qui tam relator, will receive $187,003.05 as part of the settlement.
Assistant United States Attorney Andrea Hyatt represented the government, with support from Amber Perez of the Small Business Administration. It is noted that the civil claims resolved by this settlement are only allegations, and there has been no official judgment of civil liability.
