Ajinomoto Cambrooke, Inc., a Massachusetts-based company from Ayer, has made an agreement to fork over $1,360,819.04 in settlement over allegations that it fraudulently obtained a Paycheck Protection Program (PPP) loan, a program designed to provide financial support to businesses struggling due to the COVID-19 pandemic. The U.S. Department of Justice alleged that Cambrooke, along with its parent company in Japan, didn't meet the stipulated small business size requirements to be eligible for the loan.
Implemented as part of the CARES Act on March 29, 2020, the PPP loans were forgivable if used for maintaining jobs and other approved expenses. According to an announcement by the U.S. Attorney's Office, businesses had to ensure that they conformed to specific size standards, which Cambrooke allegedly ignored by not including all of its employees in the application, specifically those of its affiliates overseas. This information surfaced after the SBA provided further guidance on May 5, 2020, clarifying how to assess a borrower's eligibility.
Cambrooke later sought and was granted full forgiveness of the loan by the SBA, leading to a deeper investigation into the matter. The settlement reached acknowledges the company's willingness to cooperate following the Justice Department’s voluntary disclosure guidelines for False Claims Act issues, which may have played a part in reducing potential penalties.
The case also involved a whistleblower component, with the qui tam action being brought under the False Claims Act. This provision allows individuals to file actions on behalf of the U.S. government and benefit from any recovery, with the whistleblower in this case receiving a 10% share of the settlement. The specific case, titled United States ex rel. Verity Investigations, LLC v. Ajinomoto Cambrooke, Inc., was handled by Assistant United States Attorney Lindsey E. Weinstein of the Affirmative Civil Enforcement Unit and represented in the Massachusetts district court.
