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A Palo Alto bakery has settled a lawsuit with the federal government for making false claims to acquire $430,000 through a program designed to help struggling businesses during the COVID-19 pandemic, the U.S. Department of Justice said on Friday.
La Baguette, a French bakery located at 170 Stanford Shopping Center, unlawfully applied for and received two loans through the Paycheck Protection Program (PPP) and later asked for and received loan forgiveness for both, leaving the Small Business Administration on the hook to cover the costs to the lenders.
The program was established through the Coronavirus Aid, Relief, and Economic Security ("CARES") Act, enacted in March 2020, to provide emergency financial assistance to Americans suffering economic effects caused by the pandemic. It also authorized forgivable loans to small businesses for employee payroll and certain other expenses. Participating lenders received processing fees from the Small Business Administration for handling the PPP loan applications. The lenders funded the loans, which were 100% guaranteed by the SBA, after application approvals.
In April 2020, La Baguette, through principal owner Scott Brunello, submitted an application for a PPP loan to a lender. La Baguette certified that from Feb., 15, 2020, through Dec. 31, 2020, the company hadn't and wouldn't receive another loan under the PPP....
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