Herb Chambers Settles PPP Loan Fraud Allegations for $11.8 Million

Herb Chambers, a Massachusetts automobile tycoon, has consented to settle with the federal government for $11.8 million over claims that his enterprises deceitfully sought and obtained pandemic-related small business assistance funds.

Several of Chambers' companies along with James Duchesneau, who holds an executive position in one of these enterprises, concurred with the settlement as per the statement from the U.S. Attorney’s office. said in a statement on Wednesday.

In 2020, the Paycheck Protection Program was initiated to support small enterprises facing difficulties due to the COVID-19 pandemic. By April 30, 2020, the Small Business Administration introduced a new regulation stating that companies within a single corporate group were ineligible to obtain over $20 million in PPP loans.

As stated by the prosecutors, once the new regulation was implemented on April 30, eight firms owned by Chambers had submitted applications for PPP loans but hadn’t yet secured financing. The prosecution claims that several months following a bank canceled these pending loan requests due to the $20 million limit, the same eight enterprises resubmitted theirPPPloan applications to another financial institution, resulting in successful fundings.

"The Paycheck Protection Program was established to offer a financial safety net to small enterprises finding it difficult to maintain operations amid the extraordinary challenges of the COVID-19 pandemic—not to function as a means for firms aiming to bypass program restrictions," stated U.S. Attorney Leah Foley.

Nicolas Gennetti, CEO of The Herb Chambers Companies, stated in an official release that the settlement arose from "differing professional opinions due to ambiguous and poorly defined criteria within the PPP loan eligibility rules."

Following the identification of the problem, Mr. Chambers instructed management to collaborate closely and earnestly with federal agencies to address and resolve the matter," explained Gennetti. "This cooperative effort is recognized within the agreement. It should be noted that all funds from the PPP loans were utilized appropriately, and no discrepancies have been suggested.

Chambers and his related corporations worked together with the federal probe, according to statements from the U.S. Attorney’s office.

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The post Herb Chambers agrees to pay $11.8 million as part of a settlement regarding PPP loan fraud accusations. appeared first on .

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