Asheville Company Agrees To Pay Over $2.1 Million To Resolve False Claims Act Allegations Relating To COVID Pandemic Relief Loan

CHARLOTTE, N.C. – U.S. Attorney Russ Ferguson announced today that d&b audiotechnik Corporation (D&B) has agreed to pay $2,130,185.14 to resolve allegations that it violated the False Claims Act by certifying in an application for a Paycheck Protection Program (PPP) loan that it had fewer than 300 employees, when it was a U.S. subsidiary of a German corporation with well over 300 employees. As a result of the misrepresentation, d&b audiotechnik obtained a loan that was forgiven by the United States. d&b audiotechnik has agreed to repay the original loan amount, plus a penalty—ultimately paying twice what was originally borrowed.

Congress created the PPP in March 2020 under the Coronavirus Aid, Relief and Economic Security (CARES) Act. The PPP was administered by the Small Business Administration (SBA) and provided forgivable loans to small businesses struggling to pay employees and other expenses during the COVID-19 pandemic. In December 2020, Congress approved funding for a second round of forgivable PPP loans. When applying for PPP loans, borrowers were required to certify that they were eligible for the requested loans and that the information they provided was true and accurate.

This matter arose from 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 for false claims and share in a portion of the government’s recovery. The qui tam case is captioned United States ex rel GNGH2 Inc. v. D&B Audiotechnik Corporation, W.D.N.C. Case No. 1:24-cv-246.

The government’s investigation was led by Assistant U.S. Attorney Seth Johnson.

Individuals with information about allegations of fraud involving COVID-19 are encouraged to report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721, or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form. 

The claims resolved by the settlement are allegations only. There has been no determination of liability.