Jerome F. Gorgon, Jr., U.S. Attorney’s Office for the Eastern District of Michigan | Department of Justice
Garber Management Group, Inc., a company affiliated with the Garber Automotive Group in Michigan, has agreed to pay $1,513,281 to settle allegations that it made false statements to obtain a Paycheck Protection Program (PPP) loan for which it was not eligible. The announcement was made by United States Attorney Jerome F. Gorgon Jr.
The PPP was established by Congress in March 2020 as part of efforts to help businesses impacted by the COVID-19 pandemic. The program allowed qualifying small businesses to receive forgivable loans backed by the U.S. Small Business Administration (SBA). Eligibility rules included limits on employee numbers and specific restrictions for certain franchises such as auto dealerships. Applicants were required to certify the accuracy of all information provided when applying for PPP loans.
According to federal authorities, Garber Management obtained a first draw PPP loan of $864,732 in May 2020. It is alleged that the company falsely certified its eligibility for both the loan and subsequent forgiveness because, when counting its affiliates, it had more than 500 employees—exceeding PPP requirements. Authorities also stated that Garber Management did not qualify as an exempt franchise since it lacked a franchise identifier code from the SBA.
"This civil settlement resolved a sealed lawsuit originally filed under the qui tam or whistleblower provisions of the False Claims Act, which permit private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery," according to officials. The case is titled U.S. ex rel. David Reed v. Garber Management, Inc., Case No. 24-cv-13126. As part of this resolution, "the whistleblower will receive 10% of the settlement amount."
Assistant U.S. Attorney Leslie Wizner handled this matter with assistance from the SBA’s Office of General Counsel.
Authorities encourage individuals who have information about possible fraud involving COVID-19 relief programs to report their concerns through channels such as the Department of Justice’s National Center for Disaster Fraud Hotline or online complaint form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
Officials noted that these are allegations only and there has been no determination of liability.
