Virginia steel distributors settle $3.3 million in False Claims Act lawsuit

RICHMOND, Va. (WRIC) -- A wholesale steel distributor corporation with locations in Virginia has agreed to pay around a $3.3 million in settlement for civil False Claims Act (FCA) allegations.

On Monday, March 9, the Department of Justice announced that seven Allied Crawford corporations, which are wholesale steel distributors across seven states, including Virginia, have agreed to pay $3,316,973.98 to settle civil FCA allegations.

These allegations arose from statements submitted in applications for Paycheck Protection Program (PPP) loans, and Allied Companies wrongfully certified that it was eligible to receive the loans, according to the release.

The United States alleged that the Allied Companies received PPP of more than $2.7 million, which was later forgiven, after statements were submitted for loan applications that falsely claimed they were eligible. As well as applications for forgiveness loans between February 2021 and October 2021, per the release.

The settlement started with the lawsuit, United States ex rel. GNGH2, Inc. v. Allied Crawford (Petersburg), Inc., which was filed under the whistleblower provision of the FCA.

This allows a private party to file a suit on behalf of the United States that is presented to the federal government. Additionally, the private party receives a portion of what the government is granted if the lawsuit is won.

For this lawsuit, the whistleblower will receive a 10% share of the settlement. The result of this case was secured due to the actions of the U.S. Attorney's Office of the Eastern District of Virginia and the U.S. Small Business Administration.

The DOJ made clear in its release that the civil claims settled are only allegations, no civil liability has been determined.

For more information, visit the U.S. Attorney's Office for the Eastern District of Virginia here.