The U.S. Attorney's Office in Grand Rapids is joining a federal lawsuit that accuses the Schostak family's group of restaurant and real estate businesses of overdrawing nearly $2.5 million from the pandemic-era Paycheck Protection Program.
The lawsuit was filed in April 2025 against five Schostak-owned businesses, including Livonia-based Schostak Brothers & Co., but was unsealed only in late August of this year, when the U.S. Attorney Timothy VerHey's office said it planned to take up the case.
The suit was brought by a San Francisco-based firm, Blockquote Inc., under the "qui tam" provisions of the False Claims Act, under which a private party can file an action on behalf of the federal government and get a portion of any recovery.
Blockquote has filed numerous such lawsuits across the country related to PPP fraud allegations, often netting six-figure awards for itself from the cases' eventual settlements.
The lawsuit accuses Schostak Brothers & Co. of violating rules in the PPP program that set a $4 million limit on the amount of forgivable loans...
The lawsuit claims the companies exceeded the $4 million limit for second-draw loans available to a single corporate group. A private firm, Blockquote Inc., originally filed the suit under the Fal...