Raleigh Company To Pay More Than $2 Million To Resolve False Claims Act Liability Related to Improper Paycheck Protection Program Loan

RALEIGH, N.C. – DynPro, Inc., an IT solutions company based in Raleigh, will pay $2,178,254 to resolve its liability for falsely obtaining a Paycheck Protection Program (PPP) loan from the U.S. Small Business Administration (SBA).

Congress created PPP loans to provide emergency financial assistance to American businesses suffering from the economic effects of the COVID-19 pandemic. Under the PPP, eligible small businesses could receive forgivable loans guaranteed by the SBA. Regulations provided various eligibility requirements for the PPP, including that to be eligible for a second-draw PPP loan, an applicant was required to have experienced at least a 25% reduction in quarterly gross receipts as a result of the pandemic.

DynPro’s second-draw PPP loan application falsely reported that DynPro had experienced a reduction in gross receipts of at least 25%, inaccurately stating the difference between the company’s gross receipts during the second quarter of 2019 and the second quarter of 2020.  In fact, DynPro did not experience a 25% reduction in gross receipts, and therefore DynPro was ineligible for the loan. DynPro also falsely certified in its second-draw loan application that “the information provided in [the] application and the information provided in all supporting documents and forms [wa]s true and accurate in all material respects.” DynPro self-reported the conduct to the United States Attorney’s Office, and cooperated with the office’s investigation, including by identifying key witnesses and documents.

“The United States Attorney’s Office will use every tool available, including the False Claims Act, to investigate and recover fraudulently obtained PPP loans,” Acting United States Attorney Daniel P. Bubar stated.  “We will continue to work closely with our partners at the SBA and elsewhere to root out waste, fraud and abuse of taxpayer funds.”

“The settlement in this matter demonstrates the excellent results achieved through the combined efforts of SBA and the Department of Justice to forcefully respond to PPP fraud. Such fraud unconscionably undermines critical pandemic relief, and SBA continues its enhanced efforts to uncover such misconduct and recover those damages,” said Wendell Davis, SBA General Counsel.

Acting U.S. Attorney Daniel P. Bubar announced the resolution, which was the result of a coordinated effort between the U.S. Attorney’s Office for the Eastern District of North Carolina and the SBA.  Assistant U.S. Attorney Andrew Kasper handled the case for the government, with assistance from the SBA’s Office of General Counsel.

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