Garber Management Group, Inc., which is part of the Garber Automotive Group in Michigan, has agreed to pay $1,513,281 to settle allegations that it made false statements to obtain a Paycheck Protection Program (PPP) loan for which it was not eligible. The announcement was made by United States Attorney Jerome F. Gorgon Jr.
The PPP was established by Congress in March 2020 to help American businesses affected by the COVID-19 pandemic. It allowed eligible small businesses to receive forgivable loans backed by the U.S. Small Business Administration (SBA). Eligibility rules included limits on the number of employees and restrictions for certain franchise businesses such as auto dealerships. Applicants were required to certify that all information provided was truthful and accurate.
According to federal authorities, Garber Management received a first draw PPP loan of $864,732 in May 2020 after certifying its eligibility and compliance with program rules. However, officials allege that Garber Management had more than 500 employees when counted together with its affiliates—exceeding the PPP’s employee limit—and did not qualify for an exemption because it lacked a franchise identifier code from the SBA.
“Garber Management has cooperated with the government investigation from its onset,” according to the press release.
The settlement resolves a lawsuit filed under the False Claims Act’s whistleblower provisions, allowing private parties to bring suit on behalf of the United States and share in any recovery. The case, now unsealed as U.S. ex rel. David Reed v. Garber Management, Inc., Case No. 24-cv-13126, will provide 10% of the settlement amount to the whistleblower.
Assistant U.S. Attorney Leslie Wizner handled this matter with support from the SBA’s Office of General Counsel.
Authorities encourage individuals with information about COVID-19-related fraud to report tips through the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or online at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
The government notes that these are allegations only and there has been no determination of liability.
