Companies pay more than $9.2 million to settle federal claims over Connecticut-linked PPP loans
Federal prosecutors in Connecticut said five civil settlements resolve allegations that businesses and a nonprofit made false statements to obtain or keep pandemic-era Paycheck Protection Program loans.
The U.S. attorney's office for the District of Connecticut has recovered more than $9.2 million since June through civil settlements resolving allegations that companies made false statements to get pandemic-era Paycheck Protection Program loans or have them forgiven, the office said Friday.
The settlements resolve allegations under the False Claims Act, a civil law, and no one was charged with a crime. The claims are the government's allegations.
Most of the cases involve second-round PPP loans, which were limited to businesses with fewer than 300 employees, including workers at foreign and domestic affiliates, prosecutors said.
United Abrasives, a North Windham manufacturer owned by an Italian company, paid more than $3 million. Prosecutors alleged it falsely certified in February 2021 that it had fewer than 300 employees when it sought a $1,983,555 loan.
Beaver Paper & Graphic Media, a Georgia company whose affiliate Koehler America is based in Stamford, and its affiliates paid more than $2.9 million over a $1,203,787 loan. Prosecutors alleged the company applied despite its accountants' advice that it was too large, then kept the forgiven money rather than returning it.
Fabbrica, a Windsor maker of building facade systems owned indirectly by an Italian construction company, agreed to pay $2,581,250 over a $2 million loan, prosecutors said.
Connecticut Pharmacy of Norwalk, Connecticut Pharmacy East Rock LTC of Wallingford and their majority owners, Scott Wolak and Bryan Lentini, agreed to pay $400,000, based on their ability to pay. Prosecutors alleged they used most of four loans to repay debts of another company the two men owned.
National Mental Health Corps, formerly Health360, a Newtown nonprofit, and its former chief executive, Particia Harrity, paid $217,978. Prosecutors alleged Harrity counted AmeriCorps volunteers as employees and that the group claimed PPP money for payroll already reimbursed by federal grants.
Whistleblowers who filed the original lawsuits will receive shares of the recoveries.
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