Cold Spring-based machine parts manufacturer Segepo-FSM has agreed to pay $887,234 in a settlement with the federal government after being accused of falsifying an application for a Paycheck Protection Program, or PPP, Loan, according to an announcement from the Department of Justice released Monday.
PPP loans were created to help small businesses ride out the economic downturns brought about by the COVID-19 pandemic and subsequent lockdowns. Eligible businesses could apply for loans, which could be forgiven under certain conditions. The loans were guaranteed by the U.S. Small Business Administration, or SBA.
A private whistleblower, who is not named in the DOJ’s announcement, sued the company for allegedly lying about the number of employees at Segepo-FSM, which at the time of the company’s loan and forgiveness application was a subsidiary of Dentressangle, a French investment company. This occurred in response to the company’s request to forgive $503,900 of loan principal…