Persico USA, Inc. has agreed to pay $1.46 million to settle allegations that it improperly obtained a Paycheck Protection Program (PPP) loan for which it was not eligible, according to an announcement from First Assistant U.S. Attorney Julianne E. Murray.
The PPP was established by Congress in March 2020 under the CARES Act and administered by the U.S. Small Business Administration (SBA). The program aimed to help small businesses maintain their workforce and cover expenses during the COVID-19 pandemic. Eligibility for PPP loans depended partly on employee headcount, including domestic and foreign affiliates.
In early 2021, Congress authorized a second round of PPP loans for certain small businesses that had already received initial funding. Persico USA is a subsidiary of a multinational manufacturer serving industries such as automotive, rotomoulding, marine, and medical sectors. The government alleges that Persico exceeded the size requirements for the second draw PPP loan because it and its foreign affiliates employed more than 300 people.
“PPP was designed keep small businesses afloat during the COVID-19 pandemic,” said First Assistant U.S. Attorney Murray. “Multinational companies that obtained loans for which they did not qualify deprived small businesses of funding intended to keep American workers employed. Our office will continue to investigate and aggressively pursue any instances of fraud or misconduct within the Paycheck Protection Program.”
The settlement resolves claims under the False Claims Act’s whistleblower provisions, allowing private individuals—known as relators—to file actions on behalf of the United States and receive part of any recovery. In this case, United States ex rel. Verity Investigations, LLC v. Persico USA, Inc., 25-cv-260-CFC (D. Del.), the relator will receive a share of the settlement.
Assistant U.S. Attorney William E. LaRosa handled this matter.
Individuals with information about potential COVID-19-related fraud are encouraged to report tips via phone at 866-720-5721 or through an online form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
The settlement does not constitute an admission of liability; all claims resolved are allegations only.
