DOJ: Connecticut U.S. Attorney’s Office Announces More Than $9.2 Million in Settlements Connected to PPP Fraud Enforcement Initiative

• Multiple companies settled allegations of falsely certifying eligibility for PPP loans, including Beaver Paper, Fabbrica, United Abrasives, Connecticut Pharmacy, and Health360.
• Relators in these cases received shares of the recoveries, such as $293,322 for GNGH2 Inc. and $308,860 for Daniel Foster.

The U.S. Attorney’s Office for the District of Connecticut announced settlements totaling more than $9.2 million with several companies accused of violating the False Claims Act by submitting false information to obtain PPP loans. The settlements resolve allegations that these companies falsely certified eligibility, including employee counts and authorized use of funds, to secure and receive forgiveness for pandemic-related loans.

Specific companies involved include Beaver Paper, Fabbrica, United Abrasives, Connecticut Pharmacy, and Health360. The government contends these entities either misrepresented employee numbers or misused PPP funds, with relators receiving portions of the recovered amounts. Investigations were conducted by the ACE Unit, SBA Office of General Counsel, and other federal agencies.

• $9.2 million Total settlements recovered since June 2026
• $2,933,219.96 Settlement paid by Beaver Paper & affiliates
• $3,088,605.45 Settlement paid by United Abrasives, Inc.

• Review PPP loan applications and forgiveness certifications for Beaver Paper, Fabbrica, United Abrasives, Connecticut Pharmacy, and Health360 for compliance with employee count and authorized use requirements.
• Cross-check employee counts on second-draw PPP loan applications against affiliated entities, as highlighted in the settlements with Beaver Paper, Fabbrica, and United Abrasives.
• Audit use of PPP funds for Connecticut Pharmacy and Health360 to ensure funds were not used for unauthorized purposes or double-dipped with other federal grants.

This story underscores the importance of rigorous due diligence and accurate certifications in PPP loan applications and forgiveness processes. Compliance officers must ensure that employee counts include all affiliates and that loan proceeds are used strictly for authorized purposes. The DOJ’s enforcement actions and settlements highlight the risk of False Claims Act liability for misrepresentations and misuse of federal funds, reinforcing the need for robust internal controls and documentation to prevent and detect fraud in pandemic relief programs.