Two companies, Setterstix Inc. and MAE-EITEL Inc., have agreed to pay a total of $1,757,603.65 to settle allegations that they improperly received Paycheck Protection Program (PPP) loans intended for small businesses. The announcement was made by U.S. Attorney Michael DiGiacomo for the Western District of New York.
The PPP was established by Congress in March 2020 to help American small businesses cope with the economic impact of the COVID-19 pandemic. The program provided forgivable loans guaranteed by the Small Business Administration (SBA). Eligibility rules required applicants to certify that they did not exceed certain employee size thresholds, including counting affiliated companies.
According to government allegations, Setterstix applied for a PPP loan in 2020 after certifying it had fewer than 500 employees, but actually had more when employees from its parent entity and affiliates were included. Similarly, MAE-EITEL obtained a PPP loan in 2021 after certifying it had fewer than 300 employees, but allegedly exceeded this number once all affiliates were counted. Both companies are part of GESCO Group, a German conglomerate that owns several industrial firms.
“PPP loans were meant to help small business weather the effects of the COVID-19 pandemic, but too often large businesses obtained these funds through subsidiaries that failed to disclose their true size,” said U.S. Attorney DiGiacomo. “This office has been committed to recovering misspent money and, in 2025, more than $10 million has already been recovered from companies and entities that obtained PPP loans through false and fraudulent representations on PPP loan applications.”
The settlement resolves claims brought under the whistleblower provisions of the False Claims Act. Under these provisions, private individuals can file actions on behalf of the United States and may receive part of any recovery. In this case, Verity Investigations, LLC filed such an action and will receive a portion of the settlement.
Assistant U.S. Attorneys David M. Coriell and Investigator Margaret McFarland handled the matter with assistance from SBA’s Office of General Counsel.
Individuals who suspect fraud related to COVID-19 relief programs are encouraged to report it through the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or online at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
It is noted that these claims are only allegations; no determination of liability has been made.
