Fashion House Enters Settlement for Receipt of Improper Paycheck Protection Program Loan

NEWARK, N.J. - A manufacturer and distributor of fashion and leather products with a principal place of business in Mercer County, New Jersey, entered into a settlement agreement with the United States resolving allegations that the company violated the False Claims Act by taking a Paycheck Protection Program (PPP) loan to which it was not entitled, U.S. Attorney Robert Frazer announced.

According to the contentions of the United States in the settlement agreement:

In May 2021, Longchamp USA, Inc. (Longchamp) applied for and received a $1,379,972 PPP loan. Under the eligibility rules in effect at that time, businesses with more than 300 employees were not eligible for PPP loans. Applicants were instructed that the 300-employee limit was inclusive of the applicant's affiliates, including affiliates whose employees were based outside the United States. In its loan application, Longchamp certified that it was eligible for the loan and that it employed no more than 300 employees. However, Longchamp was not eligible for the loan because, inclusive of its affiliates and their foreign employees, it had more than 300 employees. After receiving the PPP loan, Longchamp sought and received forgiveness of the total amount of the loan, plus interest that had accrued. The United States also paid an associated lender processing fee of $41,399.

Longchamp fully cooperated in the investigation and resolution of this matter. In accordance with the terms of the settlement agreement, Longchamp paid the United States $1,997,110. The settlement resolves a lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties, called relators, to file suit on behalf of the United States for false claims and share in a portion of the government's recovery. In this matter, the relator's share was $199,710.

The government is represented by Assistant U.S. Attorney Thandiwe Boylan of the Health Care Fraud & Opioid Enforcement Unit in Newark, with assistance from Trial Attorney Denise Grugan of the Office of Capital Access, U.S. Small Business Administration.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice's National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

The qui tam case is captioned United States ex rel. GNGH2, Inc. v. Longchamp USA, Inc., Civil Action No. 24-4488 (D.N.J.).

The claims resolved by the settlement are allegations only, and there has been no determination of liability.

###

Counsel for Longchamp USA, Inc.: Justin C. Danilewitz, Esq., Philadelphia, P.A.

Counsel for Relator GNGH2 Inc.: David Abrams, Esq., New York, NY