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NEW YORK, NY – The gilded doors of Manhattan’s Core Club haven’t shielded it from a federal fraud investigation. U.S. Attorney for the Southern District of New York, Jay Clayton, and Special Agent in Charge Amaleka McCall-Brathwaite of the SBA-OIG today announced a $360,000 settlement with TCC INTERNATIONAL LLC, CORE GRAVITY LLC, and CORE CLUB MEMBERS CORP. (collectively, the “Defendants”) for a brazen scheme to illegally obtain and attempt to forgive COVID-19 relief loans and grants.
The feds allege the Defendants knowingly violated the False Claims Act by falsely claiming eligibility for Paycheck Protection Program (PPP) loans and a Restaurant Revitalization Fund (RRF) grant. Private clubs were explicitly barred from receiving PPP funds, and non-profits – or restaurants operating *within* private clubs with limited public access – were ineligible for RRF grants. The government’s investigation revealed that TCC International LLC and Core Gravity LLC misrepresented their status to snag two PPP loans, intending – and succeeding – in using the funds to operate the exclusive private club. Simultaneously, Core Club Members Corp. allegedly lied about its non-profit status and lack of public food and beverage sales to secure an RRF grant.
The settlement, approved by U.S. District Judge Mary Kay Vyskocil, requires the Defendants to immediately pay $360,000. But that’s not all. A chilling Consent Judgment of $8,189,172.10 hangs over their heads, ready to be enforced should they fail to meet the terms of the agreement. Crucially, the Defendants have admitted responsibility for the conduct outlined in the government’s complaint – a tacit admission of guilt that speaks volumes. “New Yorkers supported these programs to protect their neighbors and their community. New Yorkers also want those who abused the programs held accountable,” Clayton stated.
According to the complaint filed in Manhattan federal court, TCC International LLC and Core Gravity LLC secured approximately $2.3 million in PPP loans, with the SBA forgiving all but $514,176.45. Core Club Members Corp. also pocketed an RRF grant. The scheme hinged on deceptive certifications submitted to the SBA, falsely attesting to their eligibility. The PPP required applicants to certify eligibility *before* receiving a loan, while forgiveness required further certification that funds were used for legitimate expenses. The RRF had similar rules, excluding businesses like the Core Club from participation.
“Falsely certifying eligibility…undermines critical relief programs designed to support small businesses,” said SBA-OIG Special Agent in Charge McCall-Brathwaite. “OIG remains dedicated to protecting the integrity of SBA’s programs and holding accountable those who exploit them for personal gain.” This isn’t just about the money; it’s about the principle. While legitimate businesses were struggling to stay afloat during the pandemic, the Core Club allegedly sought to line its pockets through deceit.
The case serves as a stark reminder that even the most exclusive institutions aren’t above the law. The U.S. Attorney’s Office and the SBA-OIG have made it clear they will relentlessly pursue those who exploited the COVID-19 relief programs, ensuring accountability and restoring public trust. The investigation remains ongoing, and further developments are expected. Expect more details as this case unfolds.
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Key Facts
- State: New York
- Agency: DOJ USAO
- Category: Fraud & Financial Crimes
- Source: Official Source ↗
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