Charles Smith, Jr. of Sharon, Massachusetts, and SMI Demolition, Inc., based in Norwood, have agreed to pay $2.01 million to settle allegations that they submitted false applications for federal pandemic relief loans. The United States government alleged that SMI Demolition falsely certified its eligibility for two Paycheck Protection Program (PPP) loans and an Economic Injury Disaster Loan (EIDL) from the Small Business Administration (SBA).
Smith pleaded guilty in 2018 to two counts of mail fraud in federal court in Massachusetts. Despite this conviction, he owned a majority stake in SMI Demolition when the company applied for a PPP loan on April 7, 2020. At that time, the application certified that no owner had pleaded guilty to a felony involving fraud. Around the same period, Smith and others prepared but did not finalize an agreement to transfer part of his ownership to another person.
SMI Demolition subsequently received two more loans from the SBA: an EIDL and a second PPP loan. The total amount of these loans was $1,448,402; all but $150,000 was forgiven by the SBA. Smith and SMI Demolition admitted that their loan applications falsely stated there were no owners with relevant felony convictions.
The U.S. government maintains that because of Smith’s felony convictions and ownership interest, SMI Demolition was not eligible for either PPP or EIDL funds and thus caused false claims for payment to be made to the SBA.
The settlement also resolves claims brought under the whistleblower provisions of the False Claims Act. This law allows private individuals to file actions on behalf of the United States and receive a share of any recovery obtained by the government. In this case, titled United States ex rel. Forsyth v. SMI Demolition, Inc. and Charles Smith, Jr., No. 23-cv-10091-NMG (D. Mass.), the whistleblower will receive about $200,000 as part of today’s resolution.
“United States Attorney Leah B. Foley and Kelly Loeffler, Administrator of the U.S. Small Business Administration made the announcement today.”
“This matter was handled by Assistant U.S. Attorneys Andrew A. Caffrey, III and Brian Sullivan.”
