Rochester company to pay $1.8 million to resolve False Claims Act allegations related to improper receipt of Paycheck Protection Program loans

ROCHESTER, N.Y. – U.S. Attorney Michael DiGiacomo announced today that Durst Image Technology US LLC (Durst) agreed to pay $1.8 million to resolve False Claims Act allegations that they improperly obtained Paycheck Protection Program (PPP) loans from the U.S. Small Business Administration (SBA) for which they were not eligible.

Congress created the PPP in March 2020 to provide emergency financial assistance to American businesses suffering from the economic effects of the COVID-19 pandemic. Under the PPP, eligible small businesses could receive forgivable loans guaranteed by the SBA. Regulations provided various eligibility requirements for the PPP, including limitations on the applicants’ number of employees, including employees of the applicants’ foreign affiliates. Specifically, applicants for second draw PPP loans were required, generally, to have 300 or fewer employees.

The United States contends that Durst obtained a forgiven PPP loan that it was not eligible for because it exceeded the size requirements for a second draw PPP loan. In 2021, when Durst obtained a second draw PPP loan, it was a wholly owned subsidiary of Durst Group AG, a company based in Brixen, Italy with multiple subsidiaries worldwide. Durst Group AG and its affiliates, including Durst, had over 300 employees at the time of Durst’s PPP loan.

“PPP was designed to support small business during the COVID-19 Pandemic,” said U.S. Attorney DiGiacomo. “When companies fail to comply with the size and eligibility rules, this office is committed to recovering taxpayer dollars that were improperly obtained and spent.”

The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act. Under those provisions, a private party—known as a relator—can file an action on behalf of the United States and receive a portion of any recovery. The qui tam case is captioned United States ex rel. GNGH2 Inc. v. Durst Image Technology US LLC, 24-cv-6185 (W.D.N.Y.). The relator will receive a share of the settlement.

This matter was handled by Assistant U.S. Attorney David M. Coriell and USAO Investigator Margaret McFarland, with assistance from the SBA’s Office of General Counsel.

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 (NCDF) 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.

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