Beko Technologies Agrees To Pay Over $3.6 Million To Resolve False Claims Act Allegations Involving Improper Paycheck Protection Program Loans

CHARLOTTE, N.C. – Beko Technologies, Corp. (Beko), a manufacturer of compressed air products located in Atlanta, Georgia and a subsidiary of a German company, has agreed to pay $3,662,026 to resolve allegations that it provided false information to obtain Paycheck Protection Program (PPP) loans for which it was not eligible, announced Russ Ferguson, U.S. Attorney for the Western District of North Carolina.

“PPP loans were designed to assist struggling businesses and to keep people employed in the middle of the pandemic,” said U.S. Attorney Ferguson.  “The program was supported by taxpayer money to help small businesses and the U.S. economy, not to bankroll foreign businesses ineligible for taxpayer-funded assistance.”

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 and provided forgivable loans to small businesses 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 settlement resolves allegations that Beko misrepresented that it was a small business when it submitted applications for PPP loans totaling over $2.5 million. The government contends that Beko represented in its loan applications that it had 104 or fewer employees when it was, in fact, a subsidiary of a Germany company with over 500 employees worldwide, and therefore was ineligible for the loans, which were forgiven in full at the expense of U.S. taxpayers

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 lawsuit is captioned United States ex rel. GNGH2 Inc. v. Beko Technologies Corp., No. 3:24-cv-980 (W.D.N.C.).

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.