Orlando Reunion and Crystal River were alleged to have knowingly given false information to support Crystal River’s PPP loan forgiveness application. As well as violating the False Claims Act (FCA), the allegations included a violation of the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA).
Florida Companies Agree to PPP Loan Forgiveness Settlement
The potential to defraud loan forgiveness is due to the Coronavirus Aid, Relief, and Economic Security (CARES) Act which authorized businesses to seek forgiveness of PPP loans if the loan funds were spent on certain eligible expenses, which include payroll.
The related but separate resorts Orlando Reunion and Crystal River both applied for and received their own PPP loans before Crystal River sought forgiveness by certifying that a portion of its loan fund was spent on the wages of Crystal River employees. However, some of the claimed employees actually worked at Orlando Reunion.
Violators Will Be Noticed and Identified
The Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division, said in a statement on the Department of Justice website: “PPP loans were intended to help small businesses retain employees and keep their doors open during the pandemic. The department is committed to holding accountable those who knowingly and improperly sought PPP loans or forgiveness of those loans.”
Special Agent in Charge Amaleka McCall-Brathwaite was more combative, adding: “This settlement demonstrates that attempts to wrongfully obtain loan forgiveness will not go unnoticed, and violators will be identified.”
Damages and Penalties for Florida Resorts
The total of $325,000 to be paid by Orlando Reunion and Crystal River as a part of the settlement includes $271,720 in damages and penalties for the FCA violations, as well as $53,280 in civil penalties for the FIRREA violations.
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