$2.2 Million Settlement: Missouri Company Repays Pandemic Loan

⏱ 2 min read

A Missouri manufacturer, VSM Abrasives Corp., has agreed to repay $2.2 million for a pandemic-era loan the company allegedly obtained by lying about its employee headcount.

The loan, worth $2 million, was part of the government’s Paycheck Protection Program, designed to save jobs and provide relief to small businesses affected by the COVID-19 pandemic.

According to allegations brought under the qui tam or whistleblower provisions of the False Claims Act, VSM certified that it had fewer than 300 employees when, in reality, it and its affiliates employ more than 300.

VSM disputes the allegations, but has agreed to repay the loan amount, with no admission of liability. The company’s cooperation was praised by the US Attorney’s Office, which said the settlement shows its commitment to ensuring government funds are spent appropriately.