In a recent crackdown on misuse of federal aid, Denver-based travel company Group Voyagers, Inc., which operates under the Globus family of brands, coughed up $3 million to settle claims it wasn't exactly upfront about its size when it applied for a Paycheck Protection Program loan. The emergency loan program, a brainchild of the Coronavirus Aid, Relief and Economic Security (CARES) Act, was handcrafted to be a crutch for small businesses limping through the pandemic, helping them to manage payroll and other operational costs. Employee headcount was a deciding factor in establishing if a company could don the label 'small business'.
Things went south for Group Voyagers when it was alleged that they misrepresented their employee count to snag a PPP loan, despite a rather substantial workforce that should have locked them out of the program. According to the U.S. Department of Justice, they claimed fewer than 300 employees, effectively shading the truth as both their foreign and domestic ranks swelled beyond that number.
The allegations surfaced courtesy of a whistleblower, whose legal maneuvering under the False Claims Act, a powerful tool in the hands of private citizens to sue on Uncle Sam's behalf, brought the issue to light. This veritable David, who went up against the corporate Goliath, operating as Verity Investigations LLC, is set to receive a $375,000 slice of the settlement pie under the same act's qui tam provisions.
The U.S. Attorney's Office for the District of Colorado wasn't pulling punches when they said that playing fast and loose with eligibility criteria can't be tolerated. To quote Acting U.S. Attorney J. Bishop Grewell, "When applying to participate in a federal program, companies must ensure that their applications are fully accurate and that they are eligible to participate in the program," as obtained by the U.S. Department of Justice. This sentiment was shared by the SBA Office of Inspector General, signaling a united front in protecting taxpayer dollars from opportunistic grabs.
Group Voyagers seemed to acknowledge the misstep, as the Justice Department acknowledged the company's cooperation following the allegations. They worked speedily to resolve matters and bolster their compliance infrastructure. While the financial settlement is a sore spot, it came without an admission of liability from Group Voyagers. The tussle can primarily be chalked up to the coordinated efforts of those at the U.S. Attorney's Office and the SBA OIG, who remain vigilant guardians of governmental programs.
