Great Lakes Wire

The United States Attorney's Office for the Eastern District of Michigan has announced civil settlements with four Michigan companies totaling $1,933,448. The settlements address allegations that these businesses violated the False Claims Act by providing false statements to obtain Paycheck Protection Program (PPP) loans from the U.S. Small Business Administration.

The PPP was established in March 2020 as a financial support mechanism for American businesses affected by the COVID-19 pandemic. It provided forgivable loans guaranteed by the SBA to eligible small businesses. The program included eligibility criteria that excluded borrowers with certain criminal histories, such as financial felonies like tax evasion. Applicants were required to certify their eligibility and provide accurate information.

Three companies—Your Fantasy Warehouse, Inc., Ugly Christmas Sweater, Inc., and Costume Agent, Inc.—secured four PPP loans and loan forgiveness totaling $504,482.00. The government alleged these companies falsely certified their eligibility because their owner, Firas “Fred” Hajjar, had pleaded guilty to felony tax evasion within five years prior.

Delta Staffing LLC received two PPP loans and loan forgiveness totaling $462,241.92 under similar false pretenses. Its owner, Bradley McKouen, allegedly failed to disclose his supervised release following a felony tax evasion conviction.

“When you steal from the American taxpayer, we are going to make sure that you are the one who pays the price,” stated U.S. Attorney Jerome F. Gorgon, Jr.

These settlements resolve a lawsuit filed under the qui tam provisions of the False Claims Act, which allows private individuals to sue on behalf of the government for false claims and share in any recovery. The whistleblower involved will receive 15% of the settlement amount.

Assistant U.S. Attorney Anthony Gentner managed this case with assistance from the SBA’s Office of General Counsel.

Individuals with knowledge of fraud related to COVID-19 relief programs are encouraged to report it via the Department of Justice’s National Center for Disaster Fraud Hotline or web complaint form.

It is important to note that these claims are only allegations; there has been no determination of liability.