New Jersey pawn shop settles COVID-19 assistance fraud allegations

by Ben Vernia | April 25th, 2022

One April 21, the Department of Justice announced that a New Jersey-based pawn shop company had agreed to settle a whistleblower’s allegations that the company obtained a second Paycheck Protection Program loan to which it was not entitled. According to DOJ’s press release:

Daniel Markus Inc., which operated pawn shops in New Jersey, and its owner have agreed to pay $50,000 in civil penalties to settle allegations that the company violated the False Claims Act and the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) by obtaining more than one Paycheck Protection Program (PPP) loan in 2020. The company also agreed to repay the duplicative PPP loan in full to its lender, relieving the U.S. Small Business Administration (SBA) of liability to the lender for the federal guaranty of approximately $240,000 on the improper loan.   

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Congress created the PPP in March 2020, as part of the Coronavirus Aid, Relief and Economic Security (CARES) Act, to provide emergency financial support to the millions of Americans suffering the economic effects caused by the COVID-19 pandemic. The CARES Act authorized billions of dollars in forgivable loans to small businesses struggling to pay employees and other business expenses. Throughout 2020, PPP loan applicants were required to certify that they would not receive more than one PPP loan prior to Dec. 31, 2020. This settlement resolves allegations that Daniel Markus Inc. knowingly and improperly received and retained a second, duplicative PPP loan in 2020.

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According to DOJ, the whistleblower will receive $3500 (a 7% relator’s share).

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