OCTOBER 17, 2023. Victory Automotive Group Inc. (Victory) has agreed to a $9 million settlement with the United States Department of Justice to resolve claims that it violated the False Claims Act by taking advantage of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Victory allegedly submitted false information in its application for a Paycheck Protection Program (PPP) loan and subsequent application for PPP loan forgiveness. A whistleblower reported this fraud by filing a qui tam lawsuit and will receive a $1.62 million reward or approximately 18% of the settlement.
The CARES Act was passed at the beginning of the COVID-19 pandemic in March 2020 to provide loans exclusively to small businesses suffering the devastating economic effects of the pandemic through the Paycheck Protection Program (PPP). This legislation also authorized these businesses to seek loan forgiveness if they used PPP loan funds on eligible expenses. An applicant was considered a small business if it met various requirements, including the number of employees, revenues and net worth of the applicant, and potential corporate affiliates that share common control of the business. When applying for both the loan and its forgiveness, borrowers were required to certify that the information provided on their applications was true and accurate. Victory’s application certified that it was a small business with fewer than 500 employees, however Victory shares common operation control with dozens of automobile dealerships nationwide. As a result, Victory and its affiliates have more than 3,000 employees, disqualifying them from receiving its $6,282,362 PPP loan, which was later forgiven as well.
The settlement is the result of a qui tam lawsuit, U.S. ex rel. Jones v. Victory Automotive Group, Inc, et al., filed by a whistleblower on behalf of the United States. The whistleblower will receive $1.62 million for his efforts in bringing these allegations to light. The U.S. Attorney for the Middle District of Florida said, “Even though the PPP Program has ended, our mandate to investigate and redress the harm from improper PPP loans to companies and sole proprietors continues … We will continue to seek repayment of those loans and, where appropriate, additional sanctions from applicants who obtained a loan to which they were not entitled.” Such efforts recoup taxpayer dollars and hold fraudsters accountable for taking advantage of the government’s efforts to stabilize small businesses during a global pandemic.
If you would like to report CARES Act or other government programs fraud, you can contact attorneys at Tycko & Zavareei LLP. Eva Gunasekera and Renée Brooker are former officials of the United States Department of Justice and prosecuted whistleblower cases under the False Claims Act. Renée served as Assistant Director at the United States Department of Justice, the office that supervises False Claims Act cases in all 94 United States District Courts. Eva was the Senior Counsel for Health Care Fraud. Eva and Renée now represent whistleblowers. For a free consultation, you can contact Renée at [email protected] (tel.: 202-417-3664) or contact Eva Gunasekera at [email protected]. You can also go to Tycko & Zavareei LLP’s website for whistleblowers to learn more at www.fraudfighters.net/.