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Longchamp USA, Inc., a Mercer County manufacturer and distributor of fashion and leather products, will pay nearly $2 million to resolve allegations it improperly obtained a pandemic-era loan by misrepresenting its employee count, U.S. Attorney Robert Frazer announced.
The settlement stems from allegations that the company violated the False Claims Act by securing a Paycheck Protection Program loan to which it was not entitled.
In May 2021, Longchamp applied for and received a $1,379,972 PPP loan. According to the United States’ contentions in the settlement agreement, the company certified in its loan application that it was eligible and employed no more than 300 employees. However, eligibility rules in effect at that time barred businesses with more than 300 employees from receiving PPP loans.
The employee count threshold included all affiliates, even those with workers based outside the United States. When counting its affiliates and their foreign employees, Longchamp exceeded the 300-employee limit, making it ineligible for the loan, according to the settlement agreement.
After receiving the loan, Longchamp obtained forgiveness of the total amount plus accrued interest. The United States also paid an associated lender processing fee of $41,399.
Longchamp fully cooperated in the investigation and resolution of the matter, according to federal officials. Under the settlement terms, the company paid the United States $1,997,110.
The case originated from a lawsuit filed under the whistleblower provision of the False Claims Act, which allows private parties to file suit on behalf of the United States for false claims and receive a portion of any recovery. The whistleblower in this case received $199,710.
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