Oakland County business accused of making false statements to obtain federal loan agrees to $1M+ settlement
A Wixom, Michigan, business accused of making false statements to obtain a loan has agreed to pay a settlement of just over $1.5 million after it was sued by the federal government, according to the Department of Justice.
3CON Corporation, a company that "designs and manufactures automated production systems for the automotive and life sciences industries," obtained a second draw Paycheck Protection Program loan for $828,498 in January 2021, the federal agency said. When it applied for the loan, 3CON shared common ownership with an Austrian company.
U.S. lawmakers created the Paycheck Protection Program in March 2020 to provide emergency assistance to businesses that faced financial challenges at the outbreak of the COVID-19 pandemic, according to federal officials. Eligible companies could apply for loans guaranteed by the Small Business Administration and later seek to have them forgiven.
Federal officials, according to the Justice Department, alleged that 3CON claimed it was eligible for the loan despite having more than 300 employees across the company and its foreign affiliates. The Small Business Administration says a borrower is ineligible for a second draw PPP loan if it has more than 300 employees.
Federal officials further alleged the company violated the False Claims Act by falsely stating to the Small Business Administration that it was eligible.
3CON has agreed to pay $1,500,439.50 to settle the lawsuit, which was filed under the False Claims Act, the DOJ said. The federal law allows private parties to file actions alleging a person or company defrauded the federal government and share in up to 30% of the government's recovery, according to Cornell Law School.
The party named in the lawsuit filed in December 2025, Verity Investigations, LLC, will receive roughly $150,000 of the settlement amount, federal officials said.
Wixom, located in Oakland County, is roughly 34 miles northwest of Detroit.
