A business owner from New Mexico has agreed to pay $3.2 million in a settlement concerning allegations of misusing COVID-19 relief funds. The United States government alleged that Leonard Vandenberg, who operates multiple restaurants in New Mexico and Texas, violated the False Claims Act by improperly using funds obtained through the Small Business Administration's Economic Injury Disaster Loan (EIDL) program. This program was expanded under the CARES Act to provide financial support during the COVID-19 pandemic.
According to the U.S. Attorney's Office, Vandenberg applied for and received three EIDL loans totaling $2,795,700 intended for working capital and expenses necessary due to economic injury caused by the pandemic. It is alleged that Vandenberg transferred most of these funds into his personal investment accounts rather than using them for their intended purpose.
In resolving these allegations, Vandenberg will pay $3,281,825.62 as part of the settlement agreement. This includes $2,731,750.26 designated as restitution towards repaying the EIDL loans and associated advances. Additionally, he has agreed not to seek or participate in any Small Business Administration programs for five years.
The investigation was conducted by Assistant United States Attorney Cassandra C. Currie along with Auditor Phillip Stella. The settlement resolves only allegations; no liability determination has been made.