North Texas Concrete Manufacturer Settles PPP Lawsuit for $1.8 Million

Speed Fab-Crete Corporation, a precast concrete manufacturer in Kennedale, Texas, agreed to pay $1,817,546.25 to resolve allegations that the company violated the False Claims Act by applying for and receiving a loan it was not eligible for in the Small Business Administration’s (SBA) Paycheck Protection Program (PPP), announced Acting U.S. Attorney for the Northern District of Texas Chad E. Meacham.

Congress created the PPP in March 2020, as part of the Coronavirus Aid, Relief and Economic Security (CARES) Act to provide emergency loans to small businesses suffering economic hardship due to the COVID-19 pandemic.  Whether an applicant qualified for a PPP loan depended on various factors.

Speed Fab-Crete applied for and received a PPP loan in the principal amount of $1,170,000 in 2020, at a time when certain of its owners were facing criminal charges.  The government contends that Speed Fab-Crete was ineligible for the loan for that reason, because applicable SBA rules disqualified a business from PPP eligibility if any owner of 20% or more of the business’s equity was subject to criminal charges.

“This office is committed to finding and recovering PPP funds that were obtained by ineligible recipients during the pandemic,” said Acting United States Attorney Chad E. Meacham.  “We will continue to investigate and take action as necessary to reclaim those funds on behalf of the American taxpayer.”

“This settlement highlights the enhanced efforts of the SBA, working with the Department of Justice, SBA’s Office of Inspector General, and other Federal law enforcement agencies, as well as private individuals who have information about possible fraud in connection with PPP loans, to pursuing those who violated PPP program requirements and holding them accountable,” said SBA General Counsel Wendell Davis.  

The settlement resolved a lawsuit filed under the qui tam or whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States and share in a portion of the government’s recovery.  The qui tam lawsuit is case number 3:23-CV-2162-S in the U.S. District Court for the Northern District of Texas, and the qui tam relator, Aidan Forsyth, will receive a 15% share of the government’s recovery as part of the settlement.  

The government was represented by Assistant United States Attorney Brian Stoltz in the lawsuit, with assistance from Lane Siems of the SBA.  The civil claims settled by the agreement are allegations only; there has been no determination of civil liability.