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2 Florida resorts agree to pay $325K for PPP fraud, settle with Department of Justice

By Sam Sachs,


TAMPA, Fla. (WFLA) — Two Florida resort companies have settled with the U.S. Department of Justice and agreed to pay a $325,000 settlement after “knowingly providing false information in support of a Paycheck Protection Program loan forgiveness application.”

The two companies, Kingwood Orlando Reunion Resort LLC and Kingwood Crystal River Resort Corp., applied for loan forgiveness via Crystal River, according to information from the USDOJ. The justice department said the companies had violated the False Claims Act and Financial Institutions Reform, Recovery and Enforcement Act through the PPP loan application.

Detailing the actions by the two Florida resort companies, USDOJ said “Orlando Reunion and Crystal River, which are related but operate separate resorts, both received separate PPP loans,” then when Crystal River sought loan forgiveness, it said in part that “it used a portion of its PPP loan to pay wages of Crystal River employees, when in fact, some of the employees to whom it claimed to have paid wages were actually Orlando Reunion employees whom Crystal River did not employ or pay.”

Under the settlement agreement reached with USDOJ, Crystal River and Orlando Reunion agreed to pay damages and penalties under provisions of both federal laws they violated, according to the department.

“Crystal River and Orlando Reunion agreed to pay $271,720 in damages and penalties under the FCA and $53,280 in civil penalties under FIRREA,” the USDOJ said.

U.S. Attorney Roger Handberg, Middle District of Florida, said one of his office’s primary missions is protecting government programs from fraud.

“We will continue to hold accountable those who abuse the CARES Act and PPP Program at the expense of the taxpayers,” Handberg said.

According to USDOJ, the loan application issues were first brought to their attention by a whistleblower who had worked at Kingwood resorts. The department said the information was provided during a lawsuit in the Middle District of Florida. As a result of the legal action, the whistleblower, a former Director of Human Resources, will receive $46,000 as part of the settlement.

“This settlement demonstrates that attempts to wrongfully obtain loan forgiveness will not go unnoticed, and violators will be identified,” Special Agent in Charge Amaleka McCall-Brathwaite of the Small Business Administration Office of the Inspector General (SBA OIG) Eastern Region said. “I want to thank the Department of Justice and our law enforcement partners for their support and dedication to pursuing justice in this case.”

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