The U.S. Department of Justice (DOJ) announced that Durst Image Technology US LLC (Durst) agreed to pay $1.8 million to resolve allegations it violated the False Claims Act (FCA).
This settlement resolves a lawsuit brought by a whistleblower under the FCA’s qui tam provision. The whistleblower alleged that Durst “obtained a forgiven PPP loan that it was not eligible for because it exceeded the size requirements for a second draw PPP loan.”
To assist U.S. businesses experiencing financial hardship after the COVID-19 pandemic, Congress created the Paycheck Protection Program (PPP) in March 2020. This program allowed the U.S. Small Business Administration (SBA) to guarantee small loans to eligible businesses. Whether a first or second-drawn loan, eligibility hinges upon having 300 or fewer employees, including foreign affiliates.
“When companies fail to comply with the size and eligibility rules, this office is committed to recovering taxpayer dollars that were improperly obtained and spent,” U.S. Attorney Michael DiGiacomo stated.
In Durst’s case, the company obtained a second draw PPP loan in 2021 as a subsidiary of Durst Group AG: “a company based in Brizen, Italy with multiple subsidiaries worldwide.” The United States alleged that “Durst Group AG and its affiliates, including Durst, had over 300 employees at the time of Durst’s PPP loan.”
As the U.S. Attorney General has noted, the False Claims Act equips ordinary Americans with critical tools to help uncover and combat fraud. A key provision of the FCA—the qui tam mechanism—allows private individuals or organizations to bring lawsuits on behalf of the U.S. government in cases of suspected fraud. Accordingly, the whistleblower in this case will receive a portion of the $1.8 million settlement.
The claims resolved by the settlement are allegations only. The DOJ did not determine liability.
