Jessica Mathews / [email protected]
An auto group entity has reached a settlement in a lawsuit alleging fraud regarding the federal Paycheck Protection Program following the COVID pandemic.
A release states LaFontaine Management Inc. - which is affiliated with the network of auto dealerships and other related entities in Michigan known as the LaFontaine Automotive Group - has agreed to pay $1.5 (M) million to settle allegations that it violated the False Claims Act by making false statements to the U.S. Small Business Administration (SBA) to obtain a Paycheck Protection Program (PPP) loan for which LaFontaine Management was ineligible.
Congress created the PPP in March 2020 to provide emergency financial assistance to American businesses suffering from the economic effects of the COVID-19 pandemic.
Under the PPP, eligible small businesses could receive forgivable loans guaranteed by the SBA. Regulations imposed various eligibility requirements for the PPP, including limitations on the number of employees and restrictions for certain types of businesses operating as franchises, such as auto dealerships. When applying for PPP loans, borrowers were required to certify the truthfulness and accuracy of all information provided in their loan applications.
In April 2020, LaFontaine Management obtained a first draw PPP loan for $1,000,000.
The United States alleged that LaFontaine Management falsely certified it was eligible for its first draw loan and loan forgiveness, even though,...
Jessica Mathews / [email protected] An auto group entity has reached a settlement in a lawsuit alleging fraud regarding the federal Paycheck Protection Program following the COVID pandemic. A release ...