Seven affiliated wholesale steel distributors operating under the Allied Crawford name have agreed to pay $3.3 million to resolve civil allegations that they improperly obtained federal pandemic relief funds through the Paycheck Protection Program, the U.S. Department of Justice said Monday.
The companies, incorporated in seven states including Virginia, were accused of falsely certifying their eligibility for PPP loans when applying for the program, which was created to help businesses retain workers during the COVID-19 pandemic.
Federal authorities alleged the distributors obtained more than $2.7 million in PPP loans, which were later forgiven, after submitting false statements on loan applications and again when seeking loan forgiveness. The certifications were submitted between February 2021 and October 2021, according to the Justice Department.
The case was filed under the False Claims Act’s whistleblower provisions, which allow private parties to bring lawsuits on behalf of the federal government alleging fraud. The lawsuit, United States ex rel. GNGH2 Inc. v. Allied Crawford (Petersburg) Inc., led to the settlement.
Under the agreement, the whistleblower will receive 10% of the settlement proceeds, the Justice Department said.
The investigation was conducted by the U.S. Attorney’s Office for the Eastern District of Virginia with assistance from the U.S. Small Business Administration.
The Justice Department said the settlement resolves civil allegations only, and there has been no determination of liability by the companies.
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