Merrick B. Garland, Attorney General | https://www.justice.gov/
Merrick B. Garland, Attorney General | https://www.justice.gov/
Marc H. Silverman, Acting United States Attorney for the District of Connecticut, announced that MacDermid Incorporated has settled allegations related to a Paycheck Protection Program (PPP) loan by paying $2,226,623.62. The allegations involved Coventya Inc., a company acquired by MacDermid in 2021, which was accused of falsely certifying its eligibility for a PPP loan.
The PPP was established in March 2020 under the CARES Act to support small businesses during the COVID-19 pandemic. Administered by the Small Business Administration (SBA), it required borrowers to certify their eligibility and provide accurate information. A second round of forgivable PPP loans became available in January 2021 with additional requirements, including a cap on employee numbers at 300.
Coventya Inc., involved in chemical manufacturing and distribution, applied for a second-draw PPP loan in April 2021 for $1,075,000, claiming fewer than 300 employees. However, it allegedly had more than 300 employees when considering its foreign affiliate. Despite this discrepancy, Coventya received and later had forgiven a total loan amount of $1,081,061.81.
Acting U.S. Attorney Silverman stated: “PPP loans were intended to help small businesses and their employees suffering the economic effects caused by the pandemic.” He emphasized commitment to holding accountable those who violated pandemic assistance program requirements.
The settlement resolves False Claims Act allegations initially brought forward by GNGH2 Inc., a whistleblower under the qui tam provisions of the act. These provisions allow private parties to sue on behalf of the government and share in any recovery; GNGH2 Inc. will receive $222,662.36 from the settlement.
The case is titled U.S. ex rel GNGH2 Inc. v. MacDermid Incorporated as successor in interest to Coventya Inc., prosecuted by Assistant U.S. Attorney Sara Kaczmarek with SBA’s Office of General Counsel's assistance.
Reports of COVID-19 fraud can be made through the Department of Justice’s National Center for Disaster Fraud Hotline or via their web complaint form.
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