Company to Pay $102,000 to Resolve Civil Fraud Allegations Related to Pandemic Loan

Burlington, Vermont - The Office of the United States Attorney for the District of Vermont announced that WP Deli LLC (WP Deli), a Colorado business, and its majority owner and chief executive, Robert Montuoro, of Stratton, Vermont, will pay $102,000 to resolve allegations that they violated the False Claims Act by misusing funds procured through the Paycheck Protection Program (PPP).

According to the settlement agreement, WP Deli, through Mr. Montuoro, submitted an application for a PPP loan in May 2020. The PPP was established pursuant to the Coronavirus Aid, Relief, and Economic Security Act to provide emergency financial assistance to millions of Americans suffering economic effects caused by the COVID-19 pandemic. Under the program, small businesses could receive loans that the Small Business Administration (SBA) would forgive if the PPP regulations were followed, including rules related to eligible uses of PPP loan proceeds.

The SBA approved WP Deli's loan application, and the company received $40,915 for use on payroll and other authorized expenses. Yet, the government's investigation revealed that in June 2020, Mr. Montuoro diverted some of the PPP funds to cover his own improper, personal expenses. In March 2021, WP Deli, through Mr. Montuoro, submitted a PPP loan forgiveness application, falsely certifying that the PPP requirements for use of the loan had been met. The government alleges that this knowing misuse of the PPP loan violated the False Claims Act, a civil fraud statute.

"PPP loans were meant to provide a lifeline to small businesses during the pandemic but instead were often misused," said First Assistant United States Attorney Michael P. Drescher. "This office will continue to pursue businesses and individuals who wrongly exploited pandemic programs and to recover ill-gotten funds on behalf of taxpayers."

To resolve the claims against them, WP Deli and Mr. Montuoro jointly have agreed to pay to the United States a total of $102,000. This amount reflects Mr. Montuoro's acceptance of responsibility and cooperation with the government investigation.

Assistant United States Attorneys Nicole Cate and Lauren Almquist Lively handled this matter for the U.S. Attorney's Office for the District of Vermont. Investigative support was provided by the United States Secret Service and the U.S. Treasury Inspector General for Tax Administration.

The settlement agreement is available at this link: Settlement Agreement USAVT and WP Deli