Two companies from Pennsylvania and one from South Carolina have agreed to a settlement with the United States, addressing allegations of False Claims Act violations. The accusations involve obtaining five Paycheck Protection Program (PPP) loans that they were not eligible for, as announced by U.S. Attorney Alina Habba.
The PPP was established in March 2020 to provide financial aid during the COVID-19 pandemic. It offered forgivable loans guaranteed by the Small Business Administration (SBA) to qualifying businesses. Applicants had to certify their eligibility and accuracy of information provided.
According to the settlement details:
Rema Tip Top of America, Inc., a Delaware-incorporated holding company with various subsidiaries, is involved through its indirect subsidiaries. C&J Welding & Construction, based in Pennsylvania, received $341,848.78 in loan forgiveness and interest for one PPP loan, with an associated lender processing fee of $11,652 paid by the United States. Industrial Services Group, Inc., operating as Universal Blastco in South Carolina, obtained two PPP loans totaling $4,824,288.99 in forgiveness and interest; associated fees amounted to $87,828.50. NexGen Industrial Services in Pennsylvania also secured two loans amounting to $3,688,618.89 in forgiveness and interest; fees reached $109,529.40.
C&J Welding, ISG, and NexGen were deemed ineligible due to undisclosed affiliations with Rema on their applications and false certifications regarding eligibility criteria related to employee or revenue limits.
The companies collectively paid $13 million plus interest under the settlement terms. This resolves a lawsuit filed under the False Claims Act's whistleblower provision allowing private parties (relators) to sue on behalf of the government for false claims and receive part of any recovery; here the relator receives $2.34 million.
U.S Attorney Habba acknowledged assistance from SBA’s Office of General Counsel.
Assistant U.S Attorney Susan J Pappy from Newark's Health Care Fraud Unit represents the government alongside Christopher J McClintock from SBA.
Reports on COVID-19-related fraud can be made via DOJ’s National Center for Disaster Fraud Hotline at 866-720-5721 or online at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
The case is titled United States ex rel Scissors LLC v Rema Tip Top of America Inc et al Civil Action No 23-20790
The resolved claims are allegations only without liability determination.
