Clinton J. Johnson U.S. Attorney | U.S. Attorney for the Northern District of Oklahoma
A New Jersey business has agreed to pay back $3.25 million after receiving Paycheck Protection Program funding it was not eligible for, according to an announcement by U.S. Attorney Clint Johnson on Apr. 14.
The case highlights ongoing efforts to recover funds distributed under the Coronavirus Aid, Relief, and Economic Security Act, known as the CARES Act. The act was created in 2020 to help businesses keep employees during the COVID-19 pandemic through forgivable loans.
Court documents show that Eurecat U.S. Incorporated received two rounds of PPP loans totaling more than $4.7 million between May 2020 and February 2021, both of which were later forgiven. However, Eurecat admitted in a settlement agreement that it exceeded the employee limit required for eligibility for a second-draw loan under amended CARES Act rules.
The civil complaint against Eurecat was filed by GNGH2, Inc., acting as a whistleblower under the Federal False Claims Act's qui tam provision. The complaint alleged that Eurecat employed over 9,000 people and is a subsidiary of Albemarle Corporation, a large publicly traded company with operations including a chemical plant in McAlester, Oklahoma.
As part of the settlement agreement, Eurecat will pay $3.25 million to the United States government; this includes more than $2 million designated as restitution. GNGH2, Inc., which brought forward the lawsuit, will receive $325,000 as its statutory share under federal law once restitution is paid.
Assistant U.S. Attorney Michael Cooper represented the Northern District of Oklahoma in this matter with assistance from the Small Business Administration’s Office of General Counsel.
According to information provided by Justice.gov/OPA/pr/justice-department-takes-action-against-covid-19-fraud/, since passage of the CARES Act federal authorities have prosecuted over 150 defendants related to fraudulent PPP claims and seized more than $75 million in cash proceeds along with real estate and luxury items purchased using those funds.
