U.S. Attorney for the Western District of Michigan, Mark Totten, announced that Exo-s US LLC has agreed to pay $3,628,819.44 to settle allegations related to a Paycheck Protection Program (PPP) loan. The manufacturing company, with locations in Coldwater, Michigan, and Howe, Indiana, was accused of violating the False Claims Act by securing a PPP loan for which it was not eligible.
“The Paycheck Protection Program provided important relief to eligible small businesses and other entities,” stated U.S. Attorney Mark Totten. “Today’s resolution demonstrates our continued commitment to work with the Small Business Administration to protect taxpayer dollars and investigate allegations of fraud on critical government programs.”
The PPP loan program was part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act in 2020 and continued under the American Rescue Plan Act (ARPA) in 2021. It aimed to assist businesses affected by the COVID-19 pandemic. One requirement for a second-draw PPP loan was that applicants could not have more than 300 employees.
In March 2021, Exo-s US LLC received a second-draw PPP loan which was later forgiven by the Small Business Administration (SBA). However, it is alleged that Exo-s US LLC exceeded the employee limit due to its affiliates.
“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,” said Therese Meers, SBA General Counsel.
The settlement resolves claims brought under the qui tam provisions of the False Claims Act against Exo-s US LLC. Under these provisions, private parties can file actions on behalf of the United States and potentially receive part of any settlement or judgment. In this instance, the United States took over the case titled U.S. ex rel. GNGH2 Inc. v. Exo-s US LLC.
Assistant United States Attorney Andrew J. Hull conducted an investigation into this matter as part of a coordinated effort between various agencies.
It should be noted that these are allegations only and there has been no determination of liability.
