BWI North America Inc., BWI Indiana Inc., and BWI Chassis Dynamics (NA) Inc. have agreed to pay $21,660,983 to settle allegations that they violated the False Claims Act by submitting false claims to obtain Paycheck Protection Program (PPP) loans for which they were not eligible.
The PPP was created in March 2020 to provide financial assistance during the COVID-19 pandemic. The program allowed eligible businesses to receive forgivable loans backed by the Small Business Administration (SBA). Eligibility requirements included limits on the number of employees and exclusions for businesses owned by government entities.
According to the U.S. Department of Justice, the BWI Entities are part of a multinational corporation supplying automotive brake and suspension systems worldwide. At the time of their loan applications, these companies were majority-owned and controlled by government enterprises of the People’s Republic of China, including the State-Owned Assets Supervision and Administration Commission of Beijing.
The United States alleges that the BWI Entities were not eligible for PPP loans because they were affiliated with other companies in China, Europe, and elsewhere. When combined with their affiliates globally, they employed more individuals than permitted under SBA size standards for their industry. Additionally, their ownership by a government entity made them ineligible under program rules.
The companies cooperated with investigators by identifying responsible individuals and sharing information from their own internal investigation. This cooperation resulted in credit being given under Department guidelines regarding disclosure, cooperation, and remediation in False Claims Act cases.
“The United States Attorney’s Office takes seriously its obligation to combat fraud and protect American taxpayers,” said Acting U.S. Attorney Richard G. Frohling for the Eastern District of Wisconsin. “This settlement demonstrates that businesses and individuals who abuse government programs like the Paycheck Protection Program will be held accountable.”
“The SBA is committed to rooting out every dollar of PPP fraud,” said SBA General Counsel Wendell Davis. “Alongside the Department of Justice Civil Fraud Section, US Attorney’s Office in the Eastern District of Wisconsin, and our other law enforcement partners, the agency will aggressively pursue bad actors to hold them accountable and recover pandemic relief funds improperly obtained from the program.”
The civil settlement resolves claims brought under whistleblower provisions that allow private parties to file actions on behalf of the United States; GNGH2 Inc., which filed such a lawsuit in this case, will receive over $2 million as part of this settlement.
The matter was handled through coordinated efforts between several agencies including Justice Department’s Civil Division, Commercial Litigation Branch Fraud Section, United States Attorney’s Office for Eastern District of Wisconsin, SBA’s Office of General Counsel and Office of Inspector General.
Trial Attorney Lindsey Roberts from DOJ Civil Division and Assistant U.S. Attorney Michael Carter from Eastern District of Wisconsin managed this case.
The allegations resolved are only accusations; there has been no determination or admission of liability.
