New Jersey Company Agrees to Repay $3.25 Million in CARES Act Funding

TULSA, Okla. - A civil settlement was unsealed showing that a New Jersey company agreed to pay back $3.25 million after receiving too much funding from the CARES Act Paycheck Protection Program, announced U.S. Attorney Clint Johnson.

In 2020, Congress enacted the Coronavirus Aid, Relief, and Economic Security Act, commonly known as the "CARES Act." Qualifying businesses were authorized to obtain a forgivable disaster loan to preserve jobs in industries impacted by COVID-19. When the CARES Act was amended, applicants were allowed to seek a second round of disaster relief funding, with restrictions on funding for single corporations. An applicant is ineligible for any funding if the business was created or organized under the laws of the People's Republic of China or the Special Administrative Region of Hong Kong, or if the applicant has significant operations in either region. Additionally, corporations seeking a second disbursement could not employ more than 300 employees.

Under the Federal False Claims Act, private individuals act as qui tam, "whistleblowers," and may bring lawsuits against entities that have committed fraud against the government. A qui tam Civil Complaint was filed by GNGH2, Inc. in March 2024, alleging that Eurecat U.S. Incorporated (Eurecat) violated the False Claims Act. Court documents show that Eurecat allegedly employed more than 9,000 people and is a subsidiary of a large publicly traded company, Albemarle Corporation, which maintains chemical processing plants in the People's Republic of China. Eurecat is a New Jersey business corporation with its principal place of business in Houston, Texas. They also operate a chemical plant in McAlester, Oklahoma.

Court documents allege that Eurecat applied for a Paycheck Protection Program (PPP) loan from the Small Business Administration in May 2020 and received $2,736,400, which was forgiven. In February 2021, Eurecat applied for a second PPP loan and received an additional $2,000,000. Prior to seeking the second loan, Eurecat allegedly completed paperwork certifying that it had no business operations in the People's Republic of China. After receiving the funds, they sought loan forgiveness a second time, and it was granted in August 2021.

In the Settlement Agreement, Eurecat admitted to exceeding the funding limits with the second PPP loan. They further admitted that they had more employees in their corporate group that exceeded the threshold. Eurecat agreed to repay the United States $3,250,000, of which $2,068,44.44 is restitution. After the restitution is paid, the United States will pay GNGH2, Inc. $325,000 as its statutory share under the False Claims Act for bringing the suit.

Assistant U.S. Attorney Michael Cooper represented the Northern District of Oklahoma, and the Small Business Administration's Office of General Counsel assisted in the litigation of this case.

The Fraud Section leads the Criminal Division's prosecution of fraud schemes that exploit the Paycheck Protection Program (PPP). Since the inception of the CARES Act, the Fraud Section has prosecuted over 150 defendants in more than 95 criminal cases and has seized over $75 million in cash proceeds derived from fraudulently obtained PPP funds, as well as numerous real estate properties and luxury items purchased with such proceeds. More information can be found at Justice.gov/OPA/pr/justice-department-takes-action-against-covid-19-fraud.