The Sconi

Richard G. Frohling, Acting United States Attorney for the Eastern District of Wisconsin, announced that Schwing America, Inc., a Minnesota-based corporation, has agreed to pay $2,894,739. This settlement resolves allegations that the company violated the False Claims Act by submitting false claims to obtain a Paycheck Protection Program (PPP) loan for which it was not eligible.

The PPP was created in March 2020 to provide financial assistance during the COVID-19 pandemic. Eligible small businesses could receive loans guaranteed by the Small Business Administration (SBA), with conditions on spending and repayment. Regulations included eligibility requirements based on employee numbers and exclusions for government-owned businesses.

Schwing America's corporate parent is Jiangsu Xuzhou State-Owned Assets Supervision and Administration Commission from China. Schwing America is affiliated with other global companies employing thousands. Despite this, Schwing America certified its eligibility for a PPP loan and received $1,932,800. The SBA forgave $1,702,787.82 in principal and interest.

The U.S. alleges that Schwing America exceeded SBA's size standard due to its affiliations and was ineligible as it is owned by a government entity. "Congress intended for the PPP to help small businesses," said Acting U.S. Attorney Frohling. "Schwing America submitted false information... The United States Attorney’s Office remains committed to pursuing companies that defraud government programs."

Wendell Davis of SBA stated: “The settlement... reflects SBA’s commitment to identifying and pursuing those who perpetrated fraud on Covid relief programs." He emphasized collaboration with law enforcement partners in these efforts.

The settlement resolves claims under the False Claims Act's qui tam provisions allowing private parties to file actions on behalf of the U.S., receiving part of any recovery. GNGH2 Inc., which filed such a lawsuit, will receive $289,473.90 from this settlement.

Assistant United States Attorney Michael Carter and Department of Justice Trial Attorney Lindsey Roberts represented the government alongside SBA in this matter. The agreement states allegations only; Schwing America does not admit liability.