Rosler Metal Finishing USA LLC To Pay Over $2.2 Million To Resolve Allegations It Received Paycheck Protection Program Loan In Violation Of Employee Size Rules

          GRAND RAPIDS – Acting U.S. Attorney for the Western District of Michigan Andrew Birge today announced that Battle Creek manufacturer Rosler Metal Finishing USA LLC, also known as Roesler Metal Finishing USA LLC (Rosler USA), has agreed to pay $2,289,505.40 to resolve allegations that it violated the False Claims Act by falsely obtaining a second-draw Paycheck Protection Program (PPP) loan for which it was ineligible.

          “The Paycheck Protection Program was intended only for those who met the eligibility criteria,” said Acting U.S. Attorney Andrew Birge. “My office will continue to pursue recipients who falsely obtained PPP loans.”

          In January of 2021, Rosler USA applied for and received a second-draw PPP loan of $1,265,035, which SBA subsequently forgave. The United States alleges that Rosler USA was ineligible for this loan because the company and its affiliates had over 300 employees. The United States also alleges that Rosler USA falsely certified in its PPP loan application that it had fewer than 300 employees (including affiliates) and omitted that it had shared ownership with other businesses.

          The PPP was an emergency loan program established by the Coronavirus Aid, Relief and Economic Security (CARES) Act in March of 2020 and expanded by the American Rescue Plan Act (ARPA) in 2021. Under the PPP, eligible businesses could obtain loans to cover payroll costs or other specified business expenses. PPP loans were guaranteed by the Small Business Administration (SBA) and subject to forgiveness if spent on eligible expenses. However, PPP loans were only available to a subset of businesses that met the eligibility criteria. As one condition to second-draw loan eligibility, the applicant company and its affiliates must have had no more than 300 employees collectively. When applying for PPP loans, borrowers were required to certify the truthfulness and accuracy of all information provided in their loan applications, including regarding their size, number of employees, and affiliate entities.

          Wendell Davis, General Counsel at the U.S. Small Business Administration said, “The settlement in this matter reflects SBA’s commitment to identifying and pursuing those who perpetrated fraud on the Paycheck Protection Program. Such fraud unconscionably undermines critical pandemic relief, and SBA continues its enhanced efforts to uncover such misconduct and recover those damages.”

          The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act against Rosler USA. Under the qui tam provisions of the False Claims Act, a private party can file an action on behalf of the United States and receive a portion of the settlement or judgment. Here, the United States elected to take over the case, investigated it, and negotiated the settlement. The qui tam case is captioned U.S. ex rel. GNGH2 Inc. v. Rosler Metal Finishing USA LLC a/k/a Roesler Metal Finishing USA LLC, No. 1:24-cv-373 (W.D. Mich.).

          The resolution obtained in this matter was the result of a coordinated effort between the U.S. Attorney’s Office for the Western District of Michigan and the SBA. Assistant United States Attorney Whitney M. Schnurr investigated this case.
The claims resolved by the settlement are allegations only and there has been no determination of liability.

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