Three companies owned by Chinese government entities have agreed to pay over $21.6 million to resolve allegations that they violated the False Claims Act by improperly obtaining Paycheck Protection Program (PPP) loans. The companies—BWI North America Inc., BWI Indiana Inc., and BWI Chassis Dynamics (NA) Inc.—are part of a global corporation that supplies automotive brake and suspension systems.
The PPP was established in March 2020 to provide emergency financial aid during the COVID-19 pandemic. Businesses could apply for forgivable loans, but had to meet certain requirements, including restrictions on the number of employees and prohibitions on ownership by government entities.
According to the United States, the BWI Entities were majority-owned and controlled by enterprises of the People’s Republic of China, specifically through the State-Owned Assets Supervision and Administration Commission of Beijing. Authorities allege that these companies were not eligible for PPP loans because their global affiliates collectively exceeded employee limits set by the Small Business Administration (SBA), and because they were ultimately owned by a government entity.
In connection with their applications, the BWI Entities certified eligibility for PPP funds. The U.S. contends this certification was false due to both excessive affiliated employment numbers and prohibited government ownership.
The settlement acknowledges cooperation from the BWI Entities during the investigation, including identifying responsible individuals and providing documents gathered internally. As a result, they received credit under Department of Justice guidelines regarding disclosure, cooperation, and remediation in False Claims Act cases.
“The United States Attorney’s Office takes seriously its obligation to combat fraud and protect American taxpayers,” said Acting U.S. Attorney Richard G. Frohling for the Eastern District of Wisconsin. “This settlement demonstrates that businesses and individuals who abuse government programs like the Paycheck Protection Program will be held accountable.”
“The SBA is committed to rooting out every dollar of PPP fraud,” said SBA General Counsel Wendell Davis. “Alongside the Department of Justice Civil Fraud Section, US Attorney’s Office in the Eastern District of Wisconsin, and our other law enforcement partners, the agency will aggressively pursue bad actors to hold them accountable and recover pandemic relief funds improperly obtained from the program.”
Part of this civil settlement resolves claims brought under whistleblower provisions allowing private parties to file actions on behalf of the United States; GNGH2 Inc., which initiated such an action, will receive more than $2 million as part of this resolution.
The investigation involved coordination between several agencies: Justice Department’s Civil Division (Commercial Litigation Branch/Fraud Section), U.S. Attorney’s Office for Eastern District of Wisconsin, SBA’s Office of General Counsel, and SBA Office of Inspector General.
Trial Attorney Lindsey Roberts from DOJ’s Civil Division and Assistant U.S. Attorney Michael Carter from Eastern District of Wisconsin managed case proceedings.
Authorities noted that these are allegations only; no determination has been made regarding liability.
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