Three Chinese-owned real estate companies have agreed to pay over $7.3 million to settle allegations that they fraudulently obtained pandemic-relief loans intended for American small businesses.
The settlement, federal prosecutors announced on Tuesday, highlights ongoing efforts to recover funds from large corporations that allegedly exploited the Paycheck Protection Program during the economic turmoil of COVID-19.
Greenland LA Metropolis Hotel Development LLC, Greenland US Management LLC, and Greenland LA Metropolis Development III will pay $7,312,283.36 to resolve False Claims Act violations. The companies are part of Greenland Holding Group Company Limited, a Chinese conglomerate with tens of thousands of employees worldwide.
Federal prosecutors allege the companies lied about their eligibility when applying for PPP loans in 2020 and 2021. The loans were designed to help struggling small businesses keep workers employed during the pandemic.
“Congress created the PPP to help American small businesses during the pandemic, not to fund large Chinese-owned corporations,” said U.S. Attorney Brad D. Schimel for the Eastern District of Wisconsin. “Here, however, the defendants are alleged to have provided false information to the SBA to obtain government funds to which they were not entitled.”
The companies allegedly concealed their affiliation with other entities in the United States and China. Together with their global affiliates, they employed far more workers than PPP regulations allowed for their industry.
Additionally, prosecutors say the companies were ineligible for second-round PPP loans because Chinese entities owned more than 20% of them. Program rules specifically excluded such foreign-owned businesses.
The settlement resolves two whistleblower lawsuits filed under the False Claims Act’s qui tam provisions. GNGH2 Inc. will receive $697,757.80, and Aidan Forsyth will receive $33,470.53 for bringing the fraud to light.
The Justice Department’s Civil Division and the U.S. Attorney’s Office for the Eastern District of Wisconsin led the investigation. The Small Business Administration’s Office of General Counsel and Office of the Inspector General assisted.
The settlement includes no admission of liability, as the allegations remain unproven in court. However, the case underscores continued federal scrutiny of PPP fraud as prosecutors work to recover misappropriated pandemic relief funds.
