Persico USA, Inc. has agreed to pay $1.46 million to resolve allegations that it improperly obtained a Paycheck Protection Program (PPP) loan for which it was not eligible, according to an announcement by First Assistant U.S. Attorney Julianne E. Murray of the District of Delaware.
The PPP was created in March 2020 under the Coronavirus Aid, Relief and Economic Security (CARES) Act and administered by the U.S. Small Business Administration (SBA). The program was designed to help small businesses maintain payroll and cover business expenses during the COVID-19 pandemic. Eligibility for PPP loans was partly based on the number of employees a business had, including both domestic and foreign affiliates.
In early 2021, Congress authorized a second round of PPP loans—known as “second draw” loans—for certain small businesses that had already received initial funding.
Persico USA is a subsidiary of a multinational company that manufactures equipment for several industries, including automotive, marine, rotomoulding, and medical sectors. According to the U.S. government, Persico exceeded the employee size limit required for eligibility for a second draw PPP loan because it and its foreign affiliates together employed more than 300 people.
“PPP was designed keep small businesses afloat during the COVID-19 pandemic,” said First Assistant U.S. Attorney Murray. “Multinational companies that obtained loans for which they did not qualify deprived small businesses of funding intended to keep American workers employed. Our office will continue to investigate and aggressively pursue any instances of fraud or misconduct within the Paycheck Protection Program.”
The settlement resolves claims brought under the False Claims Act’s qui tam provisions, which allow private individuals (relators) to file lawsuits on behalf of the United States and receive part of any recovery from such actions. In this case, United States ex rel. Verity Investigations, LLC v. Persico USA, Inc., 25-cv-260-CFC (D. Del.), the relator will receive a portion of the settlement amount.
Assistant U.S. Attorney William E. LaRosa handled this matter.
Individuals who have information about potential fraud involving COVID-19 relief programs are encouraged to report it through the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via their online complaint form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
It is noted that these are only allegations; there has been no determination of liability in this case.
