Slifco Electric, LLC, a small business based in Sterling Heights, Michigan, has agreed to pay $1,460,062 to settle allegations concerning the False Claims Act connected to the Paycheck Protection Program (PPP). Acting United States Attorney Julie A. Beck announced the settlement as part of efforts to address fraud related to this COVID-19 relief fund.
The Paycheck Protection Program, initiated in March 2020 by Congress, was aimed at helping American businesses facing economic difficulties due to the COVID-19 pandemic. This program allowed eligible small businesses to obtain forgivable loans backed by the U.S. Small Business Administration (SBA). Borrowers were required to certify the accuracy of information provided, including the disclosure of dividends or capital distributions made to owners during the loan forgiveness period.
Slifco Electric obtained a first draw PPP loan in April 2020, totaling $2,633,170. It is alleged that the company falsely certified its eligibility for full forgiveness by not disclosing $730,031 in capital distributions paid to its owner, John P. Slifco, between March 13, 2020, and the end of the covered period.
Acting U.S. Attorney Julie A. Beck commented, "When businesses and individuals obtained COVID-19 relief funds that they didn’t deserve, taxpayers were cheated. This office is committed to addressing fraud perpetrated against government programs, and we will continue to hold accountable those who violate the law."
SBA General Counsel Wendell Davis praised the collaboration that led to this resolution, stating, "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."
The settlement process was managed by Assistant U.S. Attorney Anthony Gentner from the U.S. Attorney’s Office for the Eastern District of Michigan, with support from the SBA’s Office of General Counsel. At present, the allegations remain unproven; the settlement does not constitute an admission of liability.
Those with information about possible fraud involving COVID-19 relief programs are encouraged to contact the Department of Justice’s National Center for Disaster Fraud.
For more information, individuals can call the hotline at 866-720-5721 or use the online complaint form: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form
The claims resolved by the settlement are only allegations, and there has been no determination of liability.