Three firms with direct ties to the People’s Republic of China allegedly defrauded the US government by siphoning funds allocated for American businesses.
In a new press release, the U.S Department of Justice (DOJ) accuses China-owned firms BWI North America Inc., BWI Indiana Inc. and BWI Chassis Dynamics of violating the False Claims Act by duping the government into approving Paycheck Protection Program (PPP) loans.
PPP loans were established in 2020 to aid American businesses struggling from the economic impact of the COVID-19 pandemic. Applicants had to meet strict eligibility rules. Companies that had government ownership, large headcounts and affiliations with overseas firms were excluded.
According to the DOJ, the BWI entities submitted false certifications, claiming eligibility while being majority-owned and controlled by Chinese state-run enterprises, including the State-Owned Assets Supervision and Administration Commission of Beijing.
The DOJ says that the BWI firms were ineligible for PPP loans because they were ultimately owned by the Chinese government. In addition, the DOJ finds that the BWI companies had affiliations with firms located in other parts of the globe while employing more people than allowed by eligibility rules.
To settle the allegations, all three BWI companies have agreed to collectively pay $21,660,983 to the US government.
Says acting US Attorney Richard G. Frohling for the Eastern District of Wisconsin,
“The United States Attorney’s Office takes seriously its obligation to combat fraud and protect American taxpayers. This settlement demonstrates that businesses and individuals who abuse government programs like the Paycheck Protection Program will be held accountable.”
The DOJ adds that the settlement resolves allegations only, with no determination of liability.
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