2 Florida vacation resorts settle COVID-19 loan forgiveness fraud cases

March 21 (UPI) -- Two Florida-based companies Tuesday agreed to settle criminal allegations related to violating laws related to COVID-19 financial support programs.

Kingwood Orlando Reunion Resort and Kingwood Crystal River Resort violated the False Claims Act and the Financial Institutions Reform, Recovery and Enforcement Act, according to the U.S. Justice Department.

Investigators contend both companies gave false information to support an application under the federal Paycheck Protection Program.

Congress implemented the program in 2020 as part of the broader Coronavirus Aid, Relief, and Economic Security Act, providing financial aid to small businesses suffering economic hardship.

Both businesses received PPP loan forgiveness. Authorities say Crystal River submitted claims stating it repaid several employees that were never paid in the first place, and who were actually employed by Orlando Reunion.

Under terms of the agreement, both companies agreed to pay a combined $271,720 in damages and penalties under the FCA as well as an additional $53,280 in civil penalties.

"PPP loans were intended to help small businesses retain employees and keep their doors open during the pandemic," Deputy Assistant Attorney General Brian M. Boynton, said in a statement. "The department is committed to holding accountable those who knowingly and improperly sought PPP loans or forgiveness of those loans."

Charges stemmed from an investigation by the joint-agency COVID-19 Fraud Enforcement Task Force.

"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 said in a statement.