Jerome F. Gorgon, Jr., U.S. Attorney’s Office for the Eastern District of Michigan | Department of Justice
The United States has reached a civil settlement with four Michigan companies accused of violating the False Claims Act by making false statements to obtain Paycheck Protection Program (PPP) loans. The businesses will collectively pay $1,933,448 to settle these allegations, as announced by U.S. Attorney Jerome F. Gorgon, Jr.
The PPP was established in March 2020 to assist American businesses affected by the COVID-19 pandemic. It provided forgivable loans guaranteed by the Small Business Administration (SBA), subject to eligibility requirements including exclusions for borrowers with certain criminal histories.
Your Fantasy Warehouse, Inc., Ugly Christmas Sweater, Inc., and Costume Agent, Inc. received four PPP loans totaling $504,482. The United States alleged that these businesses falsely certified their eligibility due to their owner Firas “Fred” Hajjar's undisclosed felony tax evasion conviction within the past five years.
Delta Staffing LLC obtained two PPP loans amounting to $462,241.92 under similar circumstances involving its owner Bradley McKouen's prior conviction for felony tax evasion.
U.S. Attorney Jerome F. Gorgon, Jr. stated: "When you steal from the American taxpayer, we are going to make sure that you are the one who pays the price."
The settlements resolved a lawsuit filed under the qui tam provisions of the False Claims Act, allowing private parties to sue on behalf of the United States and share in any recovery. The whistleblower in this case will receive 15% of the total settlement amount.
Assistant U.S. Attorney Anthony Gentner managed this matter with support from SBA’s Office of General Counsel.
Reports of fraud related to COVID-19 can be made through the Department of Justice’s National Center for Disaster Fraud Hotline or online complaint form.
It is important to note that these claims are allegations only and there has been no determination of liability.
