IFH Holdings Group, Inc., which operates as IGNITE Fitness Holdings and previously as ECP-PF Holdings Group, Inc., has agreed to pay over $2 million to resolve allegations regarding its receipt of a Paycheck Protection Program (PPP) loan for which it was not eligible. The company owns and manages more than 130 Planet Fitness locations across the United States and Canada, with its headquarters in Milford, Connecticut.
The PPP was established by Congress in March 2020 under the CARES Act to help small businesses maintain payroll and cover other expenses during the COVID-19 pandemic. Administered by the Small Business Administration (SBA), applicants were required to certify their eligibility and ensure that all information provided was accurate.
A second round of forgivable PPP loans became available in January 2021 after additional funding was approved by Congress in December 2020. For this "second-draw" program, borrowers generally could not have more than 300 employees unless they qualified for certain exceptions. Applicants had to certify that they met these requirements.
In February 2021, IGNITE applied for a second-draw PPP loan totaling $2 million, certifying that it qualified for a “per-location” exception to the employee-count rule. According to government allegations, this exception did not apply to IGNITE because it had more than 300 employees without qualifying for any exemption. After receiving the loan, IGNITE also received forgiveness for the full amount of $2,007,726.03—including principal and interest.
David X. Sullivan, U.S. Attorney for the District of Connecticut, stated: "IGNITE has paid $2,067,726.03 to settle allegations that it applied for and received a Paycheck Protection Program (“PPP”) loan that it was not eligible for."
The case was managed by Assistant U.S. Attorney Sara Kaczmarek with support from SBA’s Office of General Counsel.
The Department of Justice encourages anyone with information about potential COVID-19 fraud to report tips via phone at 866-720-5721 or through their online complaint form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
