WILMINGTON, Del. – Glow Networks, Inc. (“Glow Networks”), a Delaware corporation with its principal place of business in Texas, and Secova, Inc. (“Secova”), a Delaware corporation with its principal place of business in New Jersey, have agreed to pay $3,869,102.68 to resolve allegations that they improperly obtained Paycheck Protection Program (“PPP”) loans from the U.S. Small Business Administration (“SBA”) for which they were not eligible.
PPP was an emergency loan program established by Congress in March 2020 under the Coronavirus Aid, Relief, and Economic Security Act, and administered by the SBA. The program was created to support small businesses and to help them continue to pay employees and meet other business expenses during the COVID-19 pandemic. A second round of loans was authorized in early 2021. To be eligible for these Second Draw PPP loans, a business was required to certify that it had no more than 300 employees, including employees of all domestic and foreign affiliates.
Glow Networks applied for a $2,000,000 Second Draw PPP loan. Secova applied for a $184,097 Second Draw PPP loan. On their respective Second Draw loan applications, Glow Networks and Secova certified that they, together with their affiliates, had fewer than 300 employees. Glow Networks and Secova subsequently applied for (and ultimately received) forgiveness of their Second Draw loans. However, Glow Networks and Secova, together with their domestic and foreign affiliates, had more than 300 employees.
U.S. Attorney Benjamin L. Wallace announced the settlement. Assistant U.S. Attorney Claudia L. Pare handled the case.
The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act. Under those provisions, a private party—known as a relator—can file an action on behalf of the United States and receive a portion of any recovery. In this case, the relator will receive a share of the settlement.
Individuals with information about allegations of fraud involving COVID-19 are encouraged to report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
On April 7, the Department of Justice announced the creation of the National Fraud Enforcement Division (“Fraud Division”). The Fraud Division is investigating and prosecuting those who commit fraud against the American people. The Department’s work to combat fraud supports President Trump’s Task Force to Eliminate Fraud, a whole-of-government effort chaired by Vice President J.D. Vance to eliminate fraud, waste, and abuse within Federal benefit programs.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the District of Delaware. The settlement agreement is attached to this press release. Related court documents and information are located on the website of the District Court for the District of Delaware or on PACER by searching for Case No. 25-cv-513-GBW.
The claims resolved by the settlement are merely allegations. There has been no determination of liability.
Glow Networks, Inc. (“Glow Networks”), a Delaware corporation with its principal place of business in Texas, and Secova, Inc. (“Secova”), a Delaware corporation with its principal place of business in New Jersey, have agreed to pay $3,869,102.68 to resolve allegations that they improperly obtained Paycheck Protection Program (“PPP”) loans from the U.S. Small Business Administration (“SBA”) for which they were not eligible.
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