Smith Johnson, PPP Loan Fraud, Tennessee 2020

⏱ 2 min read

A Tennessee firm, Takahata Precision Tennessee, Inc., just got a hefty dose of reality for trying to pull a fast one on the feds. The Knoxville-based company agreed to pay $2.5 million to settle allegations it received and got forgiveness for a Paycheck Protection Program loan while ineligible.

Congress created the PPP to help small businesses weather the COVID-19 pandemic. But Takahata Precision allegedly fudged its numbers to qualify for a second-draw loan, hiding the fact it had more than 300 employees – the maximum allowed.

The company’s scheme unraveled when a whistleblower came forward, and the feds launched an investigation. In the end, Takahata Precision had to cough up a cool $2.5 million to settle the False Claims Act allegations.

Assistant U.S. Attorneys Alexa Ortiz Hadley and Ben Cunningham led the charge in the case, which was filed under the qui tam provisions of the False Claims Act. The qui tam case is United States ex rel. GNGH2, Inc. v. Takahata Precision Tennessee Inc., No. 3:24-cv-391 (E.D. Tenn.).

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