In a significant development related to the Paycheck Protection Program (PPP) fraud cases, Slifco Electric, LLC, a Sterling Heights-based small business, has settled for $1.46 million over false claim charges. The settlement answers allegations that the company, under the ownership of John P. Slifco, falsely certified its eligibility for loan forgiveness by withholding information about capital distributions made to its owner during the loan-covered period.
"This office is committed to addressing fraud perpetrated against government programs, and we will continue to hold accountable those who violate the law," said Acting U.S. Attorney Julie A. Beck for the Eastern District of Michigan. Created by Congress in March 2020, the PPP was a lifeline for businesses staggering under the economic distress caused by the COVID-19 pandemic. Through the program, eligible entities could secure SBA-guaranteed, forgivable loans, provided they met certain criteria and provided truthful and accurate information regarding their use of the funds, as per the U.S. Attorney's Office.
According to the allegations, having received a $2.63 million PPP loan in April 2020, Slifco Electric proceeded to make capital distributions of $730,031 to its sole owner, John P. Slifco. These transactions occurred from March 13, 2020, through the loan forgiveness covered period and were ostensibly for Mr. Slifco's expenses, a detail that, as per the allegations, was not disclosed during the loan forgiveness application process.
"The favorable settlement in this case is the product of enhanced efforts by federal agencies," stated Wendell Davis, SBA General Counsel. He emphasized the collective work involving the U.S. Attorney’s Office, the SBA’s Office of Inspector General, and other federal law enforcement agencies in recovering the fraudulently obtained funds, along with penalties. The Assistant U.S. Attorney Anthony Gentner, with support from the SBA's Office of General Counsel, managed the resolution of this case.
