ALICE + OLIVIA, LLC has agreed to pay $3.2 million to settle allegations that it improperly received a Paycheck Protection Program (PPP) loan by falsely certifying its eligibility, according to an announcement from the U.S. Attorney for the Southern District of New York, Jay Clayton, and Amaleka McCall-Brathwaite, Special Agent in Charge of the Eastern Regional Office of the U.S. Small Business Administration Office of Inspector General.
The settlement, approved by U.S. District Judge Analisa Torres, comes after ALICE + OLIVIA admitted and accepted responsibility for actions described in the government’s complaint. The company was found to be ineligible for the PPP loan due to exceeding the employee limit set by program rules.
The PPP was created to help small businesses affected by the COVID-19 pandemic through forgivable loans administered by the SBA. In early 2021, businesses seeking a second PPP loan were required to have no more than 300 employees across all domestic and foreign affiliates.
“The Paycheck Protection Program was established to help businesses weather the extraordinary economic disruption caused by the COVID-19 pandemic by offering forgivable loans,” said U.S. Attorney Jay Clayton. “But too many applicants sought and obtained loans that they were never entitled to receive. The women and men of this Office are dedicated to holding actors who attempt to bilk public programs accountable.”
“This settlement reflects our continued commitment to protecting taxpayer dollars and ensuring that federal relief programs are used as Congress intended,” said SBA-OIG Special Agent in Charge Amaleka McCall-Brathwaite. “SBA-OIG will continue working closely with our law enforcement partners to hold accountable those who misrepresent their eligibility.”
According to court documents, on January 21, 2021, ALICE + OLIVIA applied for a Second-Draw PPP loan stating it had 293 employees but actually employed more than 300 people when including affiliates. The company later applied for forgiveness of this $2 million loan on February 9, 2022, claiming it had only 271 employees at the time of application.
The government alleged that ALICE + OLIVIA violated the False Claims Act by knowingly submitting false statements about its eligibility during both its loan application and forgiveness process.
A private whistleblower lawsuit filed under seal under the False Claims Act was joined by the government as part of this case.
The matter is being handled by Assistant U.S. Attorney Rebecca Salk from the Civil Frauds Unit.
