Azumi Limited and its affiliated entities have agreed to pay $3.6 million to settle allegations of violating the False Claims Act by obtaining ineligible Paycheck Protection Program (PPP) loans. The settlement involves Azumi, LLC; Zuma NYC, LLC; Zuma Las Vegas, LLC; Zuma Japanese Restaurant Miami, LLC; Inko Nito Garey St., LLC; and Beach Chu Hallandale, LLC.
The PPP was established by Congress in March 2020 to help small businesses maintain payroll during the COVID-19 pandemic. Loans could be forgiven if used for eligible expenses like employee wages. In January 2021, a second round of loans was announced for eligible recipients.
Applicants for PPP loans were required to certify the accuracy of their applications and adhere to program rules, which included limits on total funding a corporate group could receive from both first and second draw loans.
The Azumi Entities admitted receiving loan forgiveness exceeding these limits. “The Paycheck Protection Program limits were put in place to prevent large corporate groups from obtaining a disproportionate share of the limited funds that were available to assist small businesses struggling during COVID,” said United States Attorney Leah B. Foley. Assistant Attorney General Brett A. Shumate added that improper loan acquisition harmed taxpayers and eligible businesses.
The settlement resolves claims under the qui tam provisions of the False Claims Act, allowing private parties to file actions on behalf of the U.S. and receive part of any recovery. The case is titled United States ex rel. GNGH2, Inc. v. Azumi, LLC, et al., No. 22-cv-11822 (D. Mass. 2022). GNGH2, Inc., will receive about $360,000 from this resolution.
U.S. Attorney Foley and AAG Shumate announced the settlement with assistance from the SBA’s Office of General Counsel and Office of the Inspector General. The matter was handled by Assistant U.S. Attorney Julien M. Mundele along with Trial Attorney Kimya Saied and Senior Trial Counsel Benjamin Wei from the Department of Justice’s Fraud Section.
