Kentucky automotive factory agrees to pay $3.8 million over allegation of improper loan
A Kentucky automotive manufacturer agreed to pay the federal government $3.8 million to settle allegations that it improperly received a COVID-19 relief loan, according to the U.S. Department of Justice.
The settlement involves Topy America, which has a factory in Frankfort that makes steel wheels.
The settlement arose from lawsuits that alleged Topy was not eligible for a $2 million Paycheck Protection Program loan the company received in 2021.
Congress set up the PPP program in 2020 to help companies keep employees on the payroll during the economic downturn of the early years of the pandemic.
The loan in question was limited to businesses with 300 or fewer employees. Businesses that met certain conditions didn’t have to repay loans, and the government forgave the loan to Topy.
Topy said in its application that it had 284 jobs at the time, according to a lawsuit.
However, Topy America is part of a larger corporation based in Japan that employed more than 5,800 people at the time, the lawsuit argued.
The government joined an allegation that Topy should have included the employees of foreign affiliates in its count, making it ineligible for the loan.
Topy America cooperated with the investigation of the claim by the U.S. and agreed to pay the government.
The release of the settlement called Topy’s conduct an error, and the company did not admit liability.
“Topy America quickly and responsibly addressed the concerns raised by the United States, and we expect that other PPP recipients who did not follow the applicable rules will do the same,” acting U.S. Attorney Paul McCaffrey said in the news release.
The lawsuits against Topy were filed under the False Claims Act, which allows people to make allegations of fraud involving federal money and share in any settlement.
