Sterling Heights business pays $1.4 million to settle Paycheck Protection Program violation claim
A Michigan business has paid over $1.4 million to settle allegations with the federal government that it falsely claimed eligibility for loan forgiveness under the Paycheck Protection Act.
The case against Slifco Electric LLC of Sterling Heights was detailed in a press release issued Tuesday by acting U.S. Attorney Julie A. Beck from the Eastern District of Michigan.
Congress created the PPP program in March 2020 to provide emergency assistance to businesses that faced financial challenges at the outbreak of the COVID-19 pandemic. Eligible businesses could apply for loans guaranteed by the Small Business Administration, and additional requirements applied to those seeking to have the loans forgiven at a later date.
The agreement settles allegations that Slifco violated the False Claims Act by falsely certifying that it was eligible for full loan forgiveness through the program. The United States had alleged that Slifco Electric failed to disclose that Slifco Electric paid $730,031 in capital distributions to its owner, John P. Slifco, for his personal expenses. That information would have been required as part of the application.
"When businesses and individuals obtained COVID-19 relief funds that they didn't deserve, taxpayers were cheated," Beck said in her press release. "This office is committed to addressing fraud perpetrated against government programs, and we will continue to hold accountable those who violate the law."
"The favorable settlement in this case is the product of enhanced efforts by federal agencies such as the Small Business Administration working with the U.S. Attorney's Office, SBA's Office of Inspector General and other Federal law enforcement agencies, as well as private individuals who uncover fraudulent conduct to recover the product of this fraud as well as penalties," SBA General Counsel Wendell Davis said in his statement.
The matter was handled by Assistant U.S. Attorney Anthony Gentner from the United States Attorney's Office for the Eastern District of Michigan, with assistance from the SBA's Office of General Counsel.
