The management company of the LaFontaine Automotive Group in Metro Detroit has agreed to pay $1.5 million to settle an alleged Paycheck Protection Program loan fraud.

According to the U.S. Attorney's Office, LaFontaine Management Inc. is accused of violating the False Claims Act after making false statements to the Small Business Administration to obtain PPP loans. State officials say the company obtained a $1 million loan in April 2020.

The company allegedly "falsely certified it was eligible for its first draw loan and loan forgiveness, even though, together with its affiliates, it had more than 500 employees and was not operating as a franchise with a franchise identifier code from SBA, in violation of the PPP rules," federal prosecutors say.

"Even though the PPP Program has ended, our mandate to investigate and redress the harm from fraudulent and improper PPP loans continues," said U.S. Attorney Jerome F. Gorgon, Jr. in a statement. "We will continue to vigorously pursue allegations against companies and individuals who obtained COVID-19 relief funds that they didn't deserve."

PPP loans, created in March 2020, supported eligible small businesses and were guaranteed by the SBA during the COVID-19 pandemic.

The U.S. Attorney's Office says the settlement resolved a lawsuit filed by two whistleblowers. The lawsuit was filed under the "qui tam" provisions of the False Claims Act, which allows private parties to sue on behalf of the U.S. for false claims and for a portion of what the government is able to recover.

In this case, the whistleblowers will receive a combined 15% of the settlement.

"Investigations like this one reflect collaboration of the Small Business Administration, including SBA's Office of General Counsel, and the U.S. Attorney's Office, as well as the work of private individuals who uncover fraudulent conduct to recover funds obtained through fraud," said SBA General Counsel Wendell Davis in a statement.