Virginia Company to Pay $2.5 Million In Anti-Fraud Case

ROANOKE, Va. – EBI LLC (“EBI”), a Virginia company with its principal place of business in Danville, Virginia, has agreed to pay $2,541,742.12 to resolve allegations that it fraudulently obtained a Paycheck Protection Program (“PPP”) loan from the U.S. Small Business Administration (“SBA”) for which it was not eligible. PPP was an emergency loan program established by Congress in March 2020 under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, and administered by the SBA. The CARES Act is a federal law enacted in March of 2020, that was designed to provide emergency financial assistance to people affected by the COVID-19 pandemic. The CARES Act authorized the SBA to provide loans of up to $2 million to eligible small businesses that were experiencing a loss of revenue from the COVID-19 pandemic. A second round of PPP loans was authorized in early 2021, and to be eligible, a business was required to certify, among other things, that it had no more than 300 employees, including domestic and foreign affiliates. “The Western District of Virginia is committed to combatting waste, fraud, and abuse in all federal benefit programs,” First Assistant United States Attorney Robert N. Tracci said today. The settlement resolves allegations that EBI was ineligible for its second draw PPP loan because it was affiliated with a Polish company known as COM40 Spółka z Ograniczoną Odpowiedzialnością Spółka Komandytowa, also known as Com40 Sp. z o.o. Sp. K. or Comforty Fabryka (“COM40”). EBI was a wholly owned subsidiary of COM40, and according to its financial filings, COM40 employed more than 3,000 people in 2020 and 2021. As a result, the United States contends that EBI was ineligible for its second draw PPP loan because it exceeded the SBA’s size standards based on affiliation rules. EBI cooperated with the government’s investigation and was proactive in its efforts to reach a resolution in this matter. The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act. Under those provisions, a private party known as a relator can file an action on behalf of the government and receive a portion of the recovery. The case was captioned United States ex rel. Aidan Forsyth v. EBI LLC, Docket No. 4:25-cv-00036 (W.D. Va.). In this case, the relator will receive a share of the settlement. First Assistant United States Attorney Robert N. Tracci and SBA General Counsel Wendell Davis made the announcement. The resolution was the result of a coordinated effort between the U.S. Attorney’s Office for the Western District of Virginia and the SBA. The matter was handled by Assistant U.S. Attorney Matthew G. Howells with assistance from Randall K. Martin, Trial Attorney with the SBA’s Office of General Counsel.