Rockland Congruity to pay about $3 million over PPP loan fraud

Rockland Congruity LLC (Rockland), a Delaware limited liability company with a principal place of business in Pembroke, Mass., has agreed to pay $2,687,700 to resolve allegations that it fraudulently obtained a Paycheck Protection Programme loan for which it was ineligible.

Congress enacted the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) on March 29, 2020, to provide emergency financial assistance to millions of Americans suffering the economic effects of the COVID-19 pandemic. 

The CARES Act authorised forgivable loans to small businesses for job retention and certain approved expenses through the PPP, which the Small Business Administration (SBA) administered. 

The PPP provided for loans in two “draws”—first-draw loans became available in March 2020, and second-draw loans became available in January 2021. 

To be eligible for PPP loans, businesses were required to certify on their loan applications that they met certain size standards, such as the number of employees they and their affiliated entities collectively employed. 

In determining the number of employees, businesses were generally required to count all employees of U.S. and foreign affiliates. Businesses with more than 300 employees were not eligible for second-draw loans.

As part of the settlement, Rockland admitted that in March 2021, it received a $1,709,099 second-draw PPP loan. 

Rockland certified that it was eligible for the loan under the PPP regulations in effect at the time of the application and represented on its application that it had 96 employees, including employees of affiliates. Rockland later sought and received forgiveness of the full amount of that loan. 

Prior to 2021 and through 2022, Rockland was a subsidiary of Procurri Corporation Limited, a company with global operations. When it applied for the loan and when it applied for forgiveness, Rockland had more than 300 employees, including those of Procurri, and was ineligible for the PPP loan.