LaFontaine Management Settles $1.5M PPP Loan Eligibility Dispute

LaFontaine Management Inc., associated with a Michigan automotive dealership network, has agreed to a $1.5 million settlement for allegedly obtaining Paycheck Protection Program (PPP) loans under false pretenses. The U.S. Attorney's Office charged the company with violating the federal False Claims Act by making false statements regarding its eligibility for the PPP loan during the COVID-19 pandemic relief efforts. The PPP, initiated in March 2020, aimed to provide forgivable loans to assist businesses affected by the pandemic. LaFontaine Management secured approximately $1 million in PPP loans by overstating employee numbers and misrepresenting its franchise status. The settlement follows a whistleblower lawsuit under the False Claims Act, which allows private parties to sue on behalf of the government and share in recovered funds. LaFontaine has repaid the loan in full and stated that the funds were used as intended, highlighting the evolving and sometimes unclear federal guidance during the program's initial phase. The company denies any wrongdoing or fraud and emphasizes its commitment to compliance and integrity. This case reflects ongoing federal enforcement related to pandemic relief funds and highlights the importance of precise regulatory compliance and accurate loan eligibility disclosures for businesses in the insurance and financial sectors.