Jay Clayton, U.S. Attorney for the Southern District of New York | Department of Justice
The United States Attorney for the Southern District of New York, Jay Clayton, announced a settlement in a civil fraud lawsuit involving TCC International LLC, Core Gravity LLC, and Core Club Members Corp. The companies were accused of falsely certifying their eligibility to receive two Paycheck Protection Program (PPP) loans and a Restaurant Revitalization Fund (RRF) grant during the COVID-19 pandemic.
According to federal rules, private clubs were not eligible for PPP loans. Similarly, restaurants that did not primarily serve the public or were not-for-profit organizations could not receive RRF grants. The settlement resolves claims that TCC International LLC and Core Gravity LLC used PPP funds to operate a private club despite being ineligible, while Core Club Members Corp. obtained an RRF grant as a not-for-profit with no food or beverage sales to the public.
Under the terms approved by U.S. District Judge Mary Kay Vyskocil, the defendants will pay $360,000 to the United States. This amount was determined based on their financial ability to pay. They have also signed a consent judgment for $8,189,172.10 that may be enforced if they fail to meet payment obligations under the agreement. The defendants admitted and accepted responsibility for their actions.
“The Paycheck Protection Program and Restaurant Revitalization Fund were intended to assist small businesses suffering the financial impacts of a pandemic-related lockdown,” said U.S. Attorney Jay Clayton. “New Yorkers supported these programs to protect their neighbors and their community. New Yorkers also want those who abused the programs held accountable. Our Office and the SBA are committed to doing so.”
“Falsely certifying eligibility for Paycheck Protection Program loans and Restaurant Revitalization Fund grants undermines critical relief programs designed to support small businesses and public-facing restaurants,” said SBA-OIG Special Agent in Charge Amaleka McCall-Brathwaite. “OIG remains dedicated to protecting the integrity of SBA’s programs and holding accountable those who exploit them for personal gain.”
Court documents show that TCC International LLC and Core Gravity LLC received approximately $2.3 million in PPP loans; all but $514,176.45 was forgiven by the Small Business Administration (SBA). Core Club Members Corp., meanwhile, received an RRF grant exceeding $2.3 million without repayment.
As part of this settlement process, details reveal that representatives from these entities certified false information regarding eligibility when applying for federal aid intended only for qualifying businesses serving the general public or operating on a profit basis.
The government joined an existing whistleblower lawsuit related to these allegations under provisions of the False Claims Act.
U.S. Attorney Clayton expressed appreciation for assistance from SBA-OIG in investigating this case.
The Civil Frauds Unit within the U.S. Attorney’s Office handled this matter with Assistant U.S. Attorney Jessica F. Rosenbaum overseeing proceedings.
