A whistleblower informed the federal government the auto group was not actually a small business, as it claimed to be when it applied for the loan.
Victory Automotive Group Inc. (VAG), a Port Richey, FL-based automotive management company, agreed to pay $9 million to resolve allegations it falsely claimed it was a small business when applying for Paycheck Protection Program (PPP) loan forgiveness, a violation of the False Claims Act (FCA).
Only small businesses were eligible for PPP loans, a qualification based on various factors, including the number of employees, amount of revenue and net worth of the applicant, along with any other corporate affiliates. When applying for PPP loans, borrowers were required to certify the accuracy of all information provided.
VAG's application certified it was a small business with fewer than 500 employees. However, VAG shared common operational control with dozens of automobile dealerships across the country, and VAG and its affiliates had more than 3,000 employees in total---making it ineligible for the $6.3 million PPP loan it received, which was later forgiven in full.
The settlement resolved a lawsuit filed under the whistleblower provision of the FCA. The whistleblower will receive a total of approximately $1.62 million in connection with the settlement.
"PPP loans were intended to help small businesses during the pandemic," said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the U.S. Justice Department's Civil Division. "The department is committed to holding accountable those who undermined the purpose of the PPP program and knowingly obtained PPP funds for which they were not eligible."
The resolution was the result of a coordinated effort among the Civil Division's Commercial Litigation Branch, Fraud Section and the U.S. Attorney's Office for the Middle District of Florida, with assistance from the SBA's Office of General Counsel and the SBA's Office of Inspector General.
This matter was handled by Senior Trial Counsel Benjamin C. Wei of the Civil Division and Assistant U.S. Attorney Lindsay Saxe Griffin for the Middle District of Florida, with assistance from Christopher J. McClintock of the SBA.
