Five Car Companies Settle $1.4M False Claims Act Case Over Ineligible PPP Loans

Businesses with over 500 employees allegedly misrepresented eligibility to obtain COVID-19 relief loans; whistleblower awarded over $140,000 in federal settlement.

Five car-related companies based in Bucks County, Pennsylvania, have agreed to pay $1,427,869 to settle allegations that they illegally obtained and retained Paycheck Protection Program (PPP) loans, Acting U.S. Attorney and Special Attorney Alina Habba announced from Newark, New Jersey.

According to the complaint and settlement agreement, the companies—Fred Beans Holdings, Inc.; Auto Express Enterprises, Inc.; Autorent of Doylestown Inc.; McCafferty Autorent Inc.; and Noble Advertising, Inc.—were each approved for approximately $973,395 in PPP loans in April 2020. 

The program, created under the CARES Act to support businesses during the COVID-19 pandemic, restricted eligibility to companies with 500 or fewer employees, including their affiliates.

Despite this rule, the companies certified eligibility and received the loans, even though their total combined workforce exceeded the employee threshold. Each defendant also applied for and received full loan forgiveness, including accrued interest.

Settlement and Whistleblower

Under the terms of the False Claims Act settlement, the companies will pay back more than $1.4 million to the federal government. 

The case was originally filed as a qui tam (whistleblower) action by a private individual under the name United States ex rel. Forsyth v. Fred Beans Holdings, Inc., et al., Case No. 25-2324 (D.N.J.).

As part of the resolution, the whistleblower—referred to as the relator—will receive $142,786 as their share of the government’s recovery.

The defendants cooperated fully with the government’s investigation and resolution of the matter. The settlement does not constitute an admission of liability by the companies, nor a concession by the government that its claims are unfounded.

The matter was handled by Assistant U.S. Attorney David V. Simunovich of the Health Care Fraud and Opioids Enforcement Unit in Newark.

Members of the public with information about alleged COVID-19-related fraud are encouraged to contact the National Center for Disaster Fraud Hotline at 866-720-5721 or file a complaint online at justice.gov/disaster-fraud.