AI data center engineering firm settles PPP lawsuit for $2.48 million

DALLAS - United States Attorney for the Northern District of Texas Ryan Raybould announced today that AMAX Engineering Corporation, an AI data center engineering firm, has agreed to pay $2.48 million to resolve allegations that the company violated the False Claims Act by applying for and receiving a loan that it was not eligible for in the Small Business Administration's Paycheck Protection Program.

AMAX applied for and received a second draw PPP loan in 2021 which was later forgiven in full. However, the government contended that AMAX was not a qualified small business eligible for the loan, because it and related entities collectively exceeded the applicable size standard.

The settlement resolved a lawsuit filed under the qui tam or whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States and share in a portion of the government's recovery. The qui tam lawsuit is case number 3:25-CV-3100-N in the U.S. District Court for the Northern District of Texas, and the qui tam relator, Blockquote, Inc., will receive $248,000 in connection with the settlement.

"My office continues to aggressively investigate and pursue companies that received PPP funds they were not eligible for," said U.S. Attorney Ryan Raybould. "The PPP was purposely limited to qualifying small businesses, meaning that every PPP dollar taken by a larger, ineligible company during the pandemic was a dollar that should have gone to the small businesses of Main Street America that Congress was trying to help. We are determined to hold those companies accountable and recover those taxpayer dollars."

Congress created the PPP in March 2020, as part of the Coronavirus Aid, Relief and Economic Security Act to provide emergency loans to small businesses suffering economic hardship due to the COVID-19 pandemic. Whether an applicant qualified for a PPP loan depended on various factors, including employee-count size standards for applicants.

The matter was handled by Assistant U.S. Attorney Najib Gazi, together with Attorney Amber Perez, Office of General Counsel for the Small Business Administration.

This year, the Trump Administration launched the Task Force to Eliminate Fraud and the National Fraud Enforcement Division to enhance the Administration's war on fraud, waste, and abuse in federal programs. When unscrupulous actors exploit these programs for their own financial gain, they defraud the government, harm the people these programs are designed to aid and protect and undermine American businesses that play by the rules. The Civil Division's False Claims Act enforcement plays a critical role in combatting such fraudulent schemes, recovering billions of dollars for the American taxpayers, and holding wrongdoers accountable. False Claims Act matters will continue to be on the forefront of the battle against fraud, and the Civil Division's False Claims work will support and advance the mission of the Task Force to Eliminate Fraud and the National Fraud Enforcement Division.

The civil claims settled by the agreement are allegations only, and there has been no determination of civil liability.

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