The United States has reached civil agreements with four Michigan companies to settle allegations of unlawfully obtaining Paycheck Protection Program (PPP) loans. The businesses will collectively pay $1,933,448 under the settlement. This announcement was made by U.S. Attorney Jerome F. Gorgon, Jr.
The PPP was established in March 2020 to provide financial aid to American businesses affected by the COVID-19 pandemic. It offered forgivable loans guaranteed by the Small Business Administration (SBA) to eligible small businesses, subject to certain eligibility requirements including exclusions for borrowers with specific criminal histories.
Your Fantasy Warehouse, Inc., Ugly Christmas Sweater, Inc., and Costume Agent, Inc. obtained four PPP loans totaling $504,482.00 but allegedly did so through false certifications regarding their eligibility due to their owner Firas “Fred” Hajjar’s undisclosed felony tax evasion conviction within the preceding five years.
Delta Staffing LLC received two PPP loans amounting to $462,241.92 under similar circumstances involving its owner Bradley McKouen’s prior felony tax evasion conviction and supervised release status.
U.S. Attorney Jerome F. Gorgon, Jr., emphasized accountability stating: “When you steal from the American taxpayer, we are going to make sure that you are the one who pays the price.”
These settlements resolve a lawsuit filed under the False Claims Act’s qui tam provisions allowing private parties to sue on behalf of the government for false claims and share in any recovery obtained by the government. The whistleblower involved will receive 15% of the total settlement amount.
Assistant U.S. Attorney Anthony Gentner managed this case with assistance from SBA’s Office of General Counsel.
Individuals aware of fraud related to COVID-19 can report it via the Department of Justice’s National Center for Disaster Fraud Hotline or Web Complaint Form.
It is important to note that these settlements address allegations only; no determination of liability has been made.
