Leah B. Foley United States Attorney for the District of Massachusetts | Department of Justice
Charles Smith, Jr. of Sharon, Massachusetts, and SMI Demolition, Inc., based in Norwood, have agreed to pay $2.01 million to settle allegations that the company submitted false certifications to the U.S. Small Business Administration (SBA) for pandemic relief loans.
Smith had previously pleaded guilty in federal court in Massachusetts to two counts of mail fraud in January 2018. Despite this conviction, Smith owned a majority stake in SMI Demolition when the company applied for Paycheck Protection Program (PPP) loans and an Economic Injury Disaster Loan (EIDL) in April 2020. The loan applications certified that no owner had pleaded guilty to a felony involving fraud.
According to authorities, around the time of the application, Smith and others drafted an agreement to transfer part of his ownership to another individual, but this agreement was never finalized. Nevertheless, SMI Demolition went on to apply for and receive two more SBA loans—a second PPP loan and an EIDL—totaling $1,448,402. All but $150,000 of these loans were forgiven by the SBA.
Smith and SMI Demolition admitted that their loan applications falsely stated there were no owners with certain felony convictions. Because of Smith’s prior felony conviction and his ownership interest at the time of application, SMI Demolition was not eligible for these federal loans.
The United States contends that as a result of these actions, Smith and SMI Demolition caused false claims for payment to be made to the SBA.
The settlement resolves claims brought under the qui tam or whistleblower provisions of the False Claims Act. Under this law, private individuals can file lawsuits on behalf of the government and may receive a share of any recovery obtained. In this case, known as United States ex rel. Forsyth v. SMI Demolition, Inc. and Charles Smith, Jr., No. 23-cv-10091-NMG (D. Mass.), the whistleblower will receive approximately $200,000 from today’s resolution.
“United States Attorney Leah B. Foley and Kelly Loeffler, Administrator of the U.S. Small Business Administration made the announcement today.”
“This matter was handled by Assistant U.S. Attorneys Andrew A. Caffrey, III and Brian Sullivan.”
