Longchamp USA pays nearly 2 million dollars to settle PPP loan allegations

Longchamp USA, the American arm of French leather goods brand Longchamp, has paid the US government 1,997,110 dollars to resolve allegations that it improperly received a Paycheck Protection Program (PPP) loan, the US Attorney's Office for the District of New Jersey said on Tuesday.

The office of US attorney Robert Frazer said the settlement resolves claims under the False Claims Act that the company, a manufacturer and distributor of fashion and leather goods based in Mercer County, New Jersey, took a loan for which it was not eligible under the rules of the Covid-19 pandemic relief program.

According to the government's contentions in the settlement, Longchamp applied for and received a 1,379,972-dollar PPP loan in May 2021. Under the eligibility rules in force at the time, businesses with more than 300 employees did not qualify, and the limit counted a company's affiliates, including affiliates whose staff were based outside the US. In its application, the company certified that it was eligible and employed no more than 300 people. The government contends it was not eligible because, once its affiliates and their foreign employees were included, its headcount exceeded 300.

After receiving the loan, the company sought and obtained forgiveness of the full amount plus accrued interest, and the government also paid an associated lender processing fee of 41,399 dollars, according to the settlement.

The settlement resolves a lawsuit brought under the whistleblower provision of the False Claims Act, which allows private parties, known as relators, to sue on behalf of the government and share in any recovery. The relator's share in the case was 199,710 dollars. The qui tam case is captioned United States ex rel. GNGH2, Inc. v. Longchamp USA, Inc., filed in the District of New Jersey.

"Longchamp fully cooperated in the investigation and resolution of this matter," the government's statement said. The claims resolved by the settlement are allegations only, and there has been no determination of liability.