A Delaware-based manufacturing company with operations in Fairfield, New Jersey has agreed to pay nearly $2.9 million to resolve allegations that it improperly obtained a Paycheck Protection Program (PPP) loan, according to an announcement by Senior Counsel Philip Lamparello.
Protech Powder Coatings, Inc., a subsidiary of the Canadian Protech Group, manufactures and distributes paints and specialty materials. The United States alleged that between March 2021 and January 2022, Protech Powder applied for and received PPP funds totaling more than $2 million, including interest. The government contends that the company falsely certified its eligibility for this second-draw PPP loan and subsequent forgiveness.
Authorities claim that Protech Powder exceeded the size standards set by the program when employee counts from affiliated companies were included. As a result of these alleged false statements on its application, the government also paid $60,000 in lender processing fees related to the ineligible loan.
Under the settlement agreement, Protech Powder paid $2,907,643 to resolve these allegations. The case was brought under the whistleblower provision of the False Claims Act. In this instance, the whistleblower will receive $290,764 as part of the recovery.
The PPP was established by Congress in March 2020 to provide financial support to businesses affected by COVID-19 disruptions. Businesses seeking assistance through the program were required to meet certain size and revenue criteria and certify their eligibility when applying for loans guaranteed by the Small Business Administration.
Senior Counsel Lamparello acknowledged support from the SBA’s Office of General Counsel during this matter. Assistant U.S. Attorney Susan J. Pappy represented the government in Newark.
“The claims resolved by the settlement are allegations only, and there has been no determination of liability.”
Individuals with information about attempted fraud involving COVID-19 relief programs are encouraged to contact authorities via phone or online form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
The lawsuit is titled US ex rel. GNGH2, Inc. v Protech Powder Coatings, Inc., 24-cv-08805 (D.N.J.).
