United States of America v. Condat Corporation

Detroit, Michigan civil litigation lawyers represented the Defendant accused of violating the False Claims Act by making false statements to the U.S. Small Business Administration (SBA) to obtain a Paycheck Protection Program (PPP) loan for which Condat was ineligible.

In January 2021, Condat Corporation, a Michigan company that produces a range of industrial lubricants, obtained a second draw PPP loan for $1,000,000. At the time of its loan application, Condat was a subsidiary of Condat SA, a privately held, family-owned French Company, and a member of Condat Groupe, comprised of at least 15 associated business entities worldwide. The United States alleged that Condat falsely certified that it was eligible for the second draw loan and loan forgiveness, even though, together with its affiliates, it had more than 300 employees, in violation of the PPP rules in effect at the time Condat obtained the funds.

Congress created the PPP in March 2020 to provide emergency financial assistance to American businesses suffering from the economic effects of the COVID-19 pandemic. Under the PPP, eligible small businesses could receive forgivable loans guaranteed by the SBA. Regulations provided various eligibility requirements for the PPP, including limitations on the number of employees and restrictions for foreign-owned companies. When applying for PPP loans, borrowers were required to certify the truthfulness and accuracy of all information provided in their loan applications.

Settled for $1,811,034.24.