Richard G. Frohling, Acting United States Attorney for the Eastern District of Wisconsin, announced that Schwing America, Inc., a Minnesota corporation, has agreed to pay $2,894,739. This settlement resolves allegations that the company violated the False Claims Act by submitting false claims to obtain a Paycheck Protection Program (PPP) loan for which it was not eligible.
The PPP was created by Congress in March 2020 to provide financial assistance during the COVID-19 pandemic. It allowed eligible small businesses to receive loans guaranteed by the Small Business Administration (SBA). If these loans were used on qualified expenses, they would be forgiven by the SBA. Eligibility requirements included limitations on employee numbers and exclusions for government-owned entities.
Schwing America is owned by Jiangsu Xuzhou State-Owned Assets Supervision and Administration Commission from China and is affiliated with companies employing thousands globally. Despite this, Schwing America certified its eligibility and received a loan of $1,932,800. The SBA forgave $1,702,787.82 in principal and interest.
The U.S. alleges that Schwing America exceeded the SBA’s size standard due to its global affiliations and was ineligible because it is government-owned. “Congress intended for the PPP to help small businesses,” said Acting U.S. Attorney Frohling. “Schwing America submitted false information…and will now repay.”
Wendell Davis from SBA emphasized their commitment to addressing fraud: “The settlement…reflects SBA’s commitment…to uncover fraud.” The resolution includes claims under qui tam provisions of the False Claims Act allowing private parties to file actions on behalf of the U.S., with GNGH2 Inc., receiving $289,473.90 from this settlement.
Assistant United States Attorney Michael Carter and Department of Justice Trial Attorney Lindsey Roberts represented the government alongside SBA in this matter. The agreement states allegations only; Schwing America does not admit liability.
