South Carolina Construction Company and Its Owner Settle Matter Alleging Receipt of Improper CARES Act Loans

NEWARK, N.J. - A construction company based in South Carolina and its owner entered into a settlement agreement with the United States resolving allegations that the company violated the False Claims Act by taking two Paycheck Protection Program (PPP) loans and an Economic Injury Disaster Loan (EIDL) to which the company was not entitled, U.S. Attorney Philip Sellinger announced today.

Congress created the PPP in March 2020, as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, to provide emergency financial support to the millions of Americans suffering the economic effects caused by the COVID-19 pandemic. The CARES Act authorized billions of dollars in forgivable loans to small businesses struggling to pay employees and other business expenses. The act also authorized EIDL non-forgivable loans to small businesses impacted by the COVID-19.

According to the allegations in the complaint and the contentions of the United States in the settlement agreement:

From June 20, 2020, to Nov. 21, 2021, Dennis Corp., a construction company owned by Daniel R. Dennis III, applied for and received two PPP loans, each for approximately $512,900, and a loan pursuant to the EIDL program, for $500,000. In applying for the loans, Dennis denied having a been convicted of a felony involving fraud within five years of the submitting the loan applications. In fact, in February 2017, Dennis pleaded guilty in U.S. District Court for the Northern District of West Virginia to the felony charge of conspiring to impede the IRS. As a result of Dennis's false certification on the PPP and EIDL applications, Dennis Corp. received more than $1.5 million in loans to which it was not entitled.

Dennis Corp. and Dennis fully cooperated in the investigation and resolution of this matter. In accordance with the terms of the settlement agreement, Dennis Corp. and Dennis will pay a total of $2.5 million plus interest. The settlement resolves a lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties, called relators, to file suit on behalf of the United States for false claims and share in a portion of the government's recovery. In this matter, the relator is receiving $250,180 as his share.

The government is represented by Assistant U.S. Attorney David V. Simunovich of the Health Care Fraud Unit in Newark.

Anyone with information about allegations of attempted fraud involving COVID-19 can 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 qui tam case is captioned United States ex rel. Forsyth v. Dennis Corp. et al., 23-20792 (D.N.J.).