Rema Tip Top of America, Inc., PPP Loan Fraud, New Jersey 2023

NEWARK, N.J. – In a shocking case of corporate greed, Rema Tip Top of America, Inc., a Delaware-based holding company, has settled a lawsuit with the United States government, paying a staggering $13 million in damages and interest. The settlement resolves allegations that the company and its subsidiaries, C&J Welding & Construction and Industrial Services Group, Inc., d/b/a Universal Blastco, received improper Paycheck Protection Program (PPP) loans during the COVID-19 pandemic.

According to the government's contentions, C&J Welding, an indirect subsidiary of Rema, applied for one PPP loan and received $341,848.78 in loan forgiveness and interest. The United States paid an associated lender processing fee of $11,652.00. Meanwhile, Industrial Services Group, Inc. applied for two PPP loans and received $4,824,288.99 in loan forgiveness and interest, with the United States paying associated lender processing fees of $87,828.50. NexGen Industrial Services, Inc., another indirect subsidiary of Rema, applied for two PPP loans and received $3,688,618.89 in loan forgiveness and interest, with the United States paying associated lender processing fees of $109,529.40.

The companies knowingly failed to fully disclose their affiliates, including Rema, on their PPP loan applications. They falsely certified eligibility for the PPP loans and loan forgiveness they received, despite exceeding the employee or revenue-based eligibility limits for PPP loans and loan forgiveness. As a result, they were ineligible to receive these PPP loans and loan forgiveness.

The settlement resolves a lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties, called relators, to file suit on behalf of the United States for false claims and share in a portion of the government's recovery. In this matter, the relator is receiving $2.34 million as the share.

C&J Welding, ISG, and NexGen were all part of the Rema Tip Top of America, Inc. conglomerate, which has been accused of taking advantage of the PPP program to line their pockets. The government is represented by Assistant U.S. Attorney Susan J. Pappy of the Health Care Fraud Unit in Newark, with assistance from Christopher J. McClintock of the SBA.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

The qui tam case is captioned United States ex rel. Scissors LLC v. Rema Tip Top of America, Inc., et al..

Source: https://www.justice.gov/usao-nj/pr/companies-pay-13-million-resolve-false-claims-act-liability-allegedly-receiving-improper