Milwaukee, Wisconsin and Mobile, Alabama United States District Attorney's offices sued Continental Aerospace Technologies Inc. on a False Claims Act violation theory claiming that submitting false claims to obtain a Paycheck Protection Program (PPP) loan for which it was not eligible.

Reported by: Kent Morlan

Continental designs and manufactures aircraft engines and parts. At the time it applied for its PPP loan, it was part of a large multinational corporation partially owned by Aviation Industry Corporation of China (AVIC). AVIC is wholly owned by the State-Owned Assets Supervision and Administration Commission of the State Council (SASAC), an arm of the People’s Republic of China.

In applying for its PPP loan, Continental certified that it was eligible for the PPP. The United States alleges that Continental was not eligible because it was affiliated with other companies in the United States and China, and together with its affiliates across the globe, Continental employed more individuals than permitted by SBA’s size standard for its industry. The United States also contends that Continental was not eligible because it was ultimately owned by a government entity in violation of SBA rules.

The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act, which permit private parties to file an action on behalf of the United States and receive a portion of any recovery. The lawsuits were filed by GNGH2 Inc. in the Eastern District of Wisconsin and Andrew McCarley in the Southern District of Alabama. In connection with the settlement, GNGH2 Inc. will receive $1,765,902.02.