Three Chinese-owned companies have agreed to pay $7,312,283.36 to resolve allegations that they violated the False Claims Act by submitting false claims to obtain Paycheck Protection Program (PPP) loans for which they were not eligible.
Greenland LA Metropolis Hotel Development LLC, Greenland US Management LLC, and Greenland LA Metropolis Development III, allegedly violated the False Claims Act by submitting false claims to obtain Paycheck Protection Program (PPP) loans for which they were not eligible.
Congress enacted the PPP in March 2020 to provide emergency financial assistance to Americans affected by the economic effects of the COVID-19 pandemic. Under the PPP, eligible businesses could receive forgivable loans guaranteed by the Small Business Administration (SBA). Regulations set forth various eligibility requirements for the PPP, including limitations on the number of individuals employed by the borrower and its affiliated entities. In January 2021, the SBA announced that certain parties that had previously received PPP loans were eligible to apply for a second loan. In their loan applications for both PPP rounds, borrowers were required to certify that they were eligible for the PPP and that the information they provided was accurate.
“Congress created the PPP to help American small businesses during the pandemic, not to fund large Chinese-owned corporations. Here, however, the defendants are alleged to have provided false information to the SBA to obtain government funds to which they were not entitled,” said U.S. Attorney Brad D. Schimel for the Eastern District of Wisconsin. “This settlement demonstrates that the U.S. Attorney’s Office takes seriously its obligation to combat fraud and protect American taxpayers.”
The Greenland USA Entities own and develop real estate projects and are part of a large multinational corporation ultimately owned by the Greenland Holding Group Company Limited, a Chinese company with tens of thousands of employees worldwide.
In applying for their PPP loans, the Greenland USA Entities certified that they were eligible for the PPP. The United States alleges that the Greenland USA Entities were not eligible for their first- or second-round PPP loans because they were affiliated with other companies in the United States and China, and together with their affiliates across the globe, the Greenland USA Entities employed more individuals than permitted by SBA’s size standard for their industry. Additionally, the United States alleges that the Greenland USA Entities were ineligible for their second-round PPP loans because they are more than 20 percent owned by entities organized in the People’s Republic of China.
The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act, which permit private parties to file an action on behalf of the United States and receive a portion of any recovery.
This settlement resolves claims in two related qui tam lawsuits filed by GNGH2 Inc. and Aidan Forsyth. In connection with the settlement, GNGH2 Inc. will receive $697,757.80, and Forsyth will receive $33,470.53.
The resolution obtained in this matter was the result of a coordinated effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the Eastern District of Wisconsin, with assistance from the SBA’s Office of General Counsel and Office of the Inspector General.
Trial Attorney Lindsey Roberts of the Civil Division and Assistant U.S. Attorney Michael Carter for the Eastern District of Wisconsin handled the matter.
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