An Albany-based manufacturer will pay $1.9 million to settle federal allegations it improperly obtained a pandemic relief loan, according to the U.S. Attorney’s Office.
Sark Wire Corporation agreed to the settlement to resolve claims it violated the False Claims Act by applying for and receiving a Paycheck Protection Program (PPP) loan despite being ineligible.
Federal prosecutors said PPP rules required companies to include employees of foreign affiliates when determining eligibility. Investigators found Sark Wire failed to do so.
According to officials, the company did not disclose that it was majority-owned by a Turkish conglomerate and did not include those affiliated employees in its application. When those employees were counted, the company exceeded the program’s size limits for a second-draw PPP loan.
“Sark Wire didn’t do that; if it had, it would not have been eligible for the PPP loan it received,” First Assistant U.S. Attorney John A. Sarcone III said.
The PPP program, created under the CARES Act in 2020, provided forgivable loans to small businesses affected by the COVID-19 pandemic. Eligibility for second-round loans required businesses and their affiliates to have fewer than 300 employees.
As part of the agreement, Sark Wire admitted it did not meet those requirements and improperly received loan funds and forgiveness.
The case originated from a whistleblower lawsuit filed under the False Claims Act, which allows private parties to sue on behalf of the federal government. The whistleblower will receive $190,000 as part of the settlement.
Federal officials said the case reflects ongoing efforts to recover improperly obtained pandemic relief funds.
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