Chinese Manufacturing Subsidiary Settles Paycheck Protection Program Loan Fraud Allegations for Over $5 Million

NEWARK, N.J. – A South Carolina corporation entered into a settlement agreement with the United States resolving allegations that the company violated the False Claims Act by applying for and receiving a Paycheck Protection Program (PPP) loan for which the company was not eligible, U.S. Attorney Robert Frazer announced today. According to the contentions of the United States in the settlement agreement: China Jushi USA Corp. (China Jushi USA) is a South Carolina corporation with a place of business in Columbia, South Carolina. China Jushi USA is a subsidiary of China Jushi Corp., a Chinese company that manufactures and sells fiberglass products. During the period of July 27, 2020 to June 21, 2021, China Jushi USA applied for and received a PPP loan and loan forgiveness totaling $3,590,007 (including interest). The United States contends that China Jushi USA falsely certified eligibility to receive this first-draw PPP loan and loan forgiveness totaling $3,590,007 (including interest). The United States contends that China Jushi USA knowingly made false statements, or caused false statements to be made, when it certified in its PPP loan application that it was eligible for a PPP loan. At the time of its loan application, China Jushi USA was not eligible to participate in the PPP because, inclusive of affiliates’ employees, China Jushi USA exceeded applicable size standards. In addition, because of China Jushi USA’s false statements on its loan application, the United States paid $35,581 in lender processing fees associated with the first-draw loan for which China Jushi USA was ineligible. In accordance with the terms of the settlement agreement, China Jushi USA paid the United States $5,075,823. 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 is receiving $507,582 as the share in the recovery.