In a significant financial reckoning, Asheville-based d&b audiotechnik Corporation has consented to shell out over $2.1 million to settle allegations of falsifying claims to snag a vital pandemic relief loan, according to the U.S. Attorney's Office. In what seems to be a calculated misstep during a national crisis, the company had stated it employed fewer than 300 individuals to qualify for the Paycheck Protection Program (PPP) loan, despite being a subsidiary of a much larger German entity. The settlement includes the repayment of the original loan amount plus a substantial penalty—costing the company double the funds it had received, as per the U.S. Attorney's Office.
Crafted amidst economic turmoil, Congress launched the PPP back in March 2020 as part of the CARES Act. The initiative aimed to support floundering small businesses to manage payroll and overheads during the crippling times of COVID-19. The Small Business Administration (SBA) administered the program, which later saw a second injection of funds in December 2020. Companies applying for these loans were required to candidly certify their eligibility and ensure information accuracy—a rule d&b audiotechnik appears to have willfully disregarded.
A statement by U.S. Attorney Russ Ferguson highlighted how the legal process unfolded, noting the start stemmed from a whistleblower lawsuit under the False Claims Act's provisions. This provision allows individuals to sue on behalf of the U.S. and potentially share in any government recovery. The case, United States ex rel GNGH2 Inc. v. D&B Audiotechnik Corporation, was helmed by Assistant U.S. Attorney Seth Johnson.
The financial settlement does not imply an admission of liability by d&b audiotechnik. Instead, it represents a closing chapter to allegations that could have potentially to significantly burden the company's operations. The Department of Justice continues to urge the public to report suspected COVID-19 related fraud. Individuals privy to any fraudulent schemes are encouraged to contact the National Center for Disaster Fraud Hotline or submit information through the NCDF Web Complaint Form.
