Two foreign-controlled companies agree to pay $1.75 million to resolve False Claims Act allegations related to receipt of Paycheck Protection Program loans

BUFFALO, N.Y. – U.S. Attorney Michael DiGiacomo announced today that Setterstix Inc. and MAE-EITEL Inc. have agreed to pay, collectively, $1,757,603.65 to resolve False Claims Act allegations that they obtained Paycheck Protection Program (PPP) loans from the U.S. Small Business Administration for which they were not eligible.

In March of 2020 Congress created the PPP to provide emergency financial assistance to American small businesses suffering from the economic effects of the COVID-19 pandemic. A PPP loan was both forgivable and guaranteed by the SBA.  Among the requirements for eligibility to obtain a PPP loan and subsequent forgiveness, applicants were required to disclose and certify that the applicant, together with affiliates, did not exceed size thresholds.   

In 2020, Setterstix obtained a PPP loan after certifying that it had fewer than 500 employees. The government alleges that, at the time it applied for its PPP loan, Setterstix had more than 500 employees when accounting for employees of its parent entity and affiliated companies. Similarly, in 2021, MAE obtained a PPP loan after certifying that it had fewer than 300 employees. The government alleges that, at the time it applied for its PPP loan, MAE had more than 300 employees after accounting for the employees of its parent entity and affiliated companies. Setterstix and MAE are both part of the GESCO Group, a German-based conglomerate that acquires and holds medium-sized industrial companies.

“PPP loans were meant to help small business weather the effects of the COVID-19 pandemic, but too often large businesses obtained these funds through subsidiaries that failed to disclose their true size,” said U.S. Attorney DiGiacomo. “This office has been committed to recovering misspent money and, in 2025, more than $10 million has already been recovered from companies and entities that obtained PPP loans through false and fraudulent representations on PPP loan applications.”

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. Verity Investigations, LLC v. Setterstix Inc.; MAE-AMERIKA GmbH, 25-cv-418 (W.D.N.Y.). The relator will receive a share of the settlement.

This matter was handled by Assistant U.S. Attorneys David M. Coriell and 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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