Two foreign-controlled companies have agreed to pay $1.75 million to resolve allegations related to the federal Paycheck Protection Program loans.
Setterstix Inc. and MAE-EITEL Inc. have agreed to pay the money to resolve False Claims Act allegations that they obtained the loans, for which they were not eligible, from the U.S. Small Business Administration, according to the office of U.S. Attorney for the Western District of New York Michael DiGiacomo.
Congress created the loan program to provide emergency financial assistance to small businesses suffering from the economic effects of the COVID-19 pandemic.
Among the requirements for eligibility and subsequent forgiveness was that applicants were required to certify that the applicant, together with affiliates, did not exceed size thresholds.
In 2020, Setterstix obtained a loan after certifying that it had fewer than 500 employees. The government alleges that, at the time it applied, Setterstix had more than 500 employees, when accounting for employees of its parent entity and affiliated companies.
In 2021, MAE obtained a loan after certifying that it had fewer than 300 employees. The government alleges that MAE had more than 300 employees after accounting for the employees of its parent entity and affiliated companies.
The companies are both part of the GESCO Group, a German-based conglomerate.
As a doctor and practice owner, I urge caution in expanding Pennsylvania’s False Claims Act. One reason I left the traditional insurance model was the constant threat of chargebacks and retroactive...