Restaurant Chain to Pay $7.8 Million for Misrepresenting Eligibility for Pandemic-Relief Funds

ALBANY, NEW YORK – CoreLife Eatery, LLC, which operates restaurants throughout New York, Pennsylvania, Ohio, Illinois, and Kentucky, will pay $7,809,373 to resolve allegations that it violated the False Claims Act by falsely certifying its eligibility for a Restaurant Revitalization Fund (RRF) grant when it knew or should have known that it operated too many locations to qualify.

“The Restaurant Revitalization Fund was created to support certain small businesses facing the economic hardships of the COVID-19 pandemic,” said United States Attorney John A. Sarcone III. “By submitting false information about its size to obtain a grant, CoreLife not only diverted funds from eligible recipients but also eroded public trust in critical relief efforts. Our office remains committed to enforcing the False Claims Act and holding accountable those who misrepresent their eligibility for federal funding.”

Congress enacted the American Rescue Plan Act in March 2021, as a continuation of the federal government’s efforts to provide relief to American individuals and businesses suffering the economic and public health effects of the pandemic. The Act allocated $28.6 billion to the RRF, which allowed the United States Small Business Administration (SBA) to award grants to qualifying restaurants and other eligible entities based on pandemic-related revenue losses.  Under the program, any restaurant that—together with its affiliated businesses—owned or operated more than 20 locations as of March 13, 2020, was ineligible for RRF funding.

As part of the settlement agreement, CoreLife admittedthat it and its affiliates owned and operated 29 restaurant locations as of March 13, 2020, and therefore it was ineligible for an RRF grant. Nevertheless, in May 2021, CoreLife’s managing member submitted an RRF application on the company’s behalf. The application specifically asked whether the applicant owned or operated more than 20 locations as of the eligibility date, to which CoreLife’s representative falsely responded “no.” That same question warned that applicants answering “yes” would not be eligible.  Later in the application, the managing member also initialed next to the statement: “The Applicant, together with its affiliates, does not own or operate more than 20 locations.” 

“Those who violate the False Claims Act by fraudulently receiving and retaining SBA program funding will be held accountable,” said SBA Office of Inspector General’s Eastern Region Special Agent in Charge Amaleka McCall-Brathwaite. “This settlement demonstrates that wrongfully obtaining taxpayer dollars will not go unnoticed. Violators will be identified and pursued. I want to thank the Department of Justice for its support and dedication to pursuing justice in this case.”

This matter arose from a qui tam complaint filed in the United States District Court for the Northern District of New York. The False Claims Act allows private individuals to file suit on behalf of the United States for false claims and share in any recovery. Under the settlement agreement, the relator will receive $1,171,405.96. The settlement is captioned United States ex rel. Howitt v. CoreLife Eatery, LLC, et al., No. 3:24-cv-0263 (N.D.N.Y.).

The investigation and resolution of this matter were the result of a coordinated effort between the United States Attorney’s Office for the Northern District of New York, SBA Office of Inspector General, and SBA Office of General Counsel. The United States was represented by Assistant United States Attorneys Adam J. Katz and Christopher R. Moran, and Department of Justice Trial Attorney Samuel Robins.