Topy America, Inc., a steel wheel manufacturer based in Frankfort, Kentucky, has agreed to pay $3,840,188.19 to the United States. This payment resolves allegations that the company improperly obtained a Paycheck Protection Program (PPP) loan from the U.S. Small Business Administration (SBA) for which it was not eligible.
The PPP was established by Congress in March 2020 to aid small American businesses facing financial difficulties during the COVID-19 pandemic. The program allowed eligible businesses to receive forgivable loans guaranteed by the SBA. Applicants were required to certify their eligibility and provide accurate information when applying for these loans.
Allegations against Topy America involve false certification of eligibility for a second-draw PPP loan in January 2021. The company applied for a $2 million loan, claiming it had fewer than 300 employees. However, it is alleged that Topy America and its foreign affiliates together exceeded this employee threshold, making them ineligible for the loan they received and subsequently had forgiven.
Acting U.S. Attorney Paul McCaffrey stated: "Our office is committed to holding accountable businesses and individuals who improperly obtained COVID-19 relief funds." He noted that Topy America addressed concerns quickly and responsibly.
The government encourages anyone with information on potential COVID-19 fraud to report it through various channels including the Department of Justice’s National Center for Disaster Fraud Hotline or online complaint form.
This settlement also resolves lawsuits filed under the qui tam provisions of the False Claims Act by private citizens on behalf of the United States. These provisions allow private parties to bring fraud allegations to government attention and share in any financial recovery. Individuals involved in filing these complaints may receive part of the settlement proceeds.
Assistant U.S. Attorney Meghan Stubblebine handled this matter with assistance from the SBA’s Office of General Counsel. It is important to note that resolved claims are only allegations without any determination of liability.