Prosecutors say the settlement resolves serious allegations under the False Claims Act. Here's how much they'll pay.
BUFFALO, N.Y. — Two companies have agreed to pay more than $1.75 million to settle allegations that they obtained federal Paycheck Protection Program loans for which they were not eligible, according to the U.S. Attorney's Office.
Setterstix Inc. and MAE-EITEL Inc. will collectively pay $1,757,603.65 to resolve claims under the False Claims Act that they secured loans from the U.S. Small Business Administration after improperly certifying their employee counts. Prosecutors said the settlement addresses allegations that the companies failed to meet size requirements required for PPP loan eligibility and forgiveness.
The PPP — created by Congress in March of 2020 to aid small businesses during the COVID-19 pandemic — offered forgivable, Small Business Administration-guaranteed loans. To qualify, businesses were required to "disclose and certify that the applicant, together with affiliates, did not exceed size thresholds."
According to the government, Setterstix obtained a PPP loan in 2020 after certifying it had fewer than 500 employees, but investigators allege the company actually had more than 500 employees when including its parent and affiliated entities.
Similarly, MAE obtained a PPP loan in 2021 after certifying that it had fewer than 300 employees; the government says the company exceeded that threshold once all affiliated employees were counted.
Both...
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