In a significant development for South Carolina’s business community, five companies have reached settlements totaling more than $7.9 million over allegations of fraudulently obtaining Paycheck Protection Program (PPP) loans. The settlements were announced by U.S. Attorney Bryan P. Stirling for the District of South Carolina, who emphasized the importance of protecting taxpayer funds and holding accountable those who violate program requirements.
Details of the Settlements
The companies involved include EuWe Eugen US Plastics Inc., Mankiewicz Coatings, LLC, Fukoku America, Inc., AWL Automation, LLC, and Stoba USA Corp. Each company was accused of violating the False Claims Act by misrepresenting their employee numbers to qualify for PPP loans, which were intended to support small businesses during the economic downturn caused by the COVID-19 pandemic.
EuWe Eugen US Plastics Inc., based in Williamston, agreed to pay $2,175,000 after it was found that its combined employee count with its German parent company exceeded the 300-employee cap for second draw loans. Similarly, Mankiewicz Coatings, LLC, located in Charleston, will pay $1,850,000 for exceeding the 500-employee limit for first draw loans.
Fukoku America, Inc., with its principal office in Laurens, settled for $1,800,000. The company had falsely certified that it had 157 employees, while the actual number, including its Japanese parent company, was above the allowed threshold. AWL Automation, LLC, from Spartanburg, agreed to a $1,100,000 settlement, and Stoba USA Corp., also in Charleston, will pay $993,784.86, both for similar misrepresentations.
Legal and Community Implications
The settlements highlight the ongoing efforts by federal authorities to ensure compliance with the CARES Act, which was enacted to provide financial relief during the pandemic. The U.S. Small Business Administration (SBA), which administered the PPP loans, required businesses to certify their eligibility based on employee numbers, including those of foreign affiliates.
The cases were pursued under the qui tam provisions of the False Claims Act, allowing whistleblowers to bring forward information about fraud against the government. As a result, relators in these cases received a portion of the settlement amounts.
Assistant United States Attorneys Austin E. McCullough and James C. Leventis, Jr., led the investigations, with assistance from Kandace Zelaya of the SBA Office of the General Counsel. While the settlements resolve the allegations, there has been no determination of liability.
Original reporting: MyrtleBeachSC News — read the source article.
