Fair Lawn Company to Pay $2.9M Over Improper COVID Loan

Ulma Form Works, Inc. agrees to pay nearly $2.9 million to resolve claims it received and forgave a pandemic relief loan it was not eligible for.

A Bergen County construction supply company has agreed to pay the federal government $2.9 million to resolve allegations that it improperly obtained and forgave a Paycheck Protection Program (PPP) loan during the COVID-19 pandemic, Acting U.S. Attorney and Special Attorney Alina Habba announced.

Ulma Form Works, Inc., headquartered in Fair Lawn, entered into a settlement agreement with the U.S. Department of Justice to resolve claims that it violated the False Claims Act by receiving a $2 million PPP loan in January 2021, despite being ineligible under the rules then in effect.

According to the complaint and the settlement agreement, eligibility for second-draw PPP loans required applicants to have no more than 300 employees, including affiliates, whether domestic or international. Ulma certified in its loan application that it met this criterion. However, federal authorities contend that the company and its foreign affiliates employed more than 300 individuals, rendering it ineligible.

Despite its ineligibility, Ulma’s loan was approved and later fully forgiven, including the interest accrued. Following the government's inquiry, Ulma cooperated fully with the investigation and agreed to settle without admitting liability.

As part of the settlement, Ulma will pay $2,902,795 to the United States. The case was originally filed under the whistleblower provision of the False Claims Act, which allows private individuals—referred to as relators—to file suit on behalf of the federal government and share in any recovery. In this case, Verity Investigations, LLC, the relator, will receive $290,279 as its share of the settlement.

The case, titled United States ex rel. Verity Investigations, LLC v. Ulma Form Works, Inc., was filed in the District of New Jersey under docket number 25-890.

The investigation was conducted by the Small Business Administration’s Office of the Inspector General, under the direction of Special Agent in Charge Amaleka McCall-Brathwaite, with support from the SBA’s Office of General Counsel. Assistant U.S. Attorney David V. Simunovich of the Health Care Fraud and Opioid Enforcement Unit in Newark handled the matter for the government.

The Department of Justice encourages individuals with knowledge of COVID-19-related fraud to contact the National Center for Disaster Fraud at 866-720-5721 or online at justice.gov/disaster-fraud.