The DOJ said Takahata TN failed to include employees of its foreign affiliates when it applied for a second-draw PPP loan and forgiveness.
SCOTT COUNTY, Tenn. — A Scott County company will pay $2.5 million after allegations it violated the False Claims Act by applying for, receiving and obtaining loan forgiveness under the Paycheck Protection Program despite ineligibility, according to the U.S. Department of Justice.
The DOJ said Takahata TN, based in Helenwood, didn't include employees from its foreign affiliates when applying for a second-draw PPP loan and forgiveness, which would have pushed the company over 300 employees and made it ineligible.
The False Claims Act was enacted as part of the Coronavirus Aid, Relief and Economic Security Act, to help small businesses facing economic hardship.
On May 21, 2020, the SBA published a rule clarifying that affiliated foreign employees must be included when a company calculated its total number of employees for PPP loan eligibility.
The settlement with Takahata TN resolves a lawsuit filed under the "qui tam," or whistleblower, provisions of the False Claims Act, which permits private parties to sue on behalf of the government for false claims and receive a share of any recovery, the DOJ said.
“This settlement is another example of our office’s commitment to holding accountable those who disregard program requirements and obtain federal funds they are not entitled to,” U.S. Attorney Francis M. Hamilton III said. “Our office...
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