SW North America, Inc., a machining and automation supplier, has agreed to pay $1,520,958.14 to settle allegations of violating the False Claims Act. The company is accused of improperly applying for and receiving a Paycheck Protection Program (PPP) loan from the Small Business Administration (SBA) for which it was not eligible, according to Acting United States Attorney for the Northern District of Texas Chad E. Meacham.
The PPP was established by Congress in March 2020 under the CARES Act to provide emergency financial assistance to small businesses facing economic hardship due to the COVID-19 pandemic. Eligibility for PPP loans was based on various criteria, including employee-count size standards.
SW North America received a PPP loan of $1,204,400 in 2021, which was subsequently fully forgiven. However, a lawsuit alleged that SW North America, along with its affiliates, exceeded the permissible size limits and was therefore ineligible for the loan.
Acting United States Attorney Chad E. Meacham stated, “PPP loans were intended, first and foremost, to help eligible small businesses during the COVID-19 pandemic. This office will continue to aggressively pursue loan recipients who were not eligible to obtain taxpayer funds, whether due to their size or for any other reason.”
The settlement resolves a qui tam lawsuit (case number 3:24-CV-1123-N) filed under the whistleblower provisions of the False Claims Act. This allows private individuals to sue on behalf of the government and receive a share of any recovered funds. The relator in this case, GNGH2 Inc., will receive $187,003.05 as part of the settlement.
The government was represented by Assistant United States Attorney Andrea Hyatt, with assistance from Amber Perez of the SBA. The claims settled are allegations, and there has been no determination of civil liability.
