Three subsidiaries of a massive Chinese property developer have agreed to pay over $7.3 million to the federal government, resolving allegations that they took pandemic relief funds meant for struggling American small businesses.
The Department of Justice announced the settlement on Tuesday, targeting Greenland LA Metropolis Hotel Development LLC, Greenland US Management LLC, and Greenland LA Metropolis Development III. Collectively known as the “Greenland USA Entities,” these companies are part of the Greenland Holding Group Company Limited, a multinational corporation based in China with a global workforce numbering in the tens of thousands.
According to federal prosecutors, the companies applied for and received Paycheck Protection Program (PPP) loans despite being ineligible. The government alleged that the firms falsely certified their eligibility, ignoring rules regarding size and foreign ownership.
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“Congress created the PPP to help American small businesses during the pandemic, not to fund large Chinese-owned corporations,” said U.S. Attorney Brad D. Schimel for the Eastern District of Wisconsin. “Here, however, the defendants are alleged to have provided false information to the SBA to obtain government funds to which they were not entitled.”
The dispute centers on the specific requirements for PPP loans, which were rolled out in March 2020 as an emergency lifeline for businesses crushed by COVID-19 lockdowns. To qualify, businesses generally had to fall under a certain size threshold regarding their employee count.
The U.S. government alleged that when Greenland USA applied for the funds, they were affiliated with so many other companies across the U.S. and China that their total employee headcount far exceeded the Small Business Administration’s limits.
Furthermore, the government claimed the companies were ineligible for a second round of PPP funding specifically because they were more than 20 percent owned by entities organized in the People’s Republic of China—a disqualifying factor introduced for later draws of the relief money.
The case began thanks to whistleblowers. The civil settlement resolves allegations brought under the qui tam provisions of the False Claims Act, which allows private citizens to sue on behalf of the government and share in the recovery.
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Two whistleblowers, GNGH2 Inc. and Aidan Forsyth, filed the initial lawsuits. For their role in exposing the alleged fraud, GNGH2 Inc. will receive approximately $697,000, while Forsyth will receive roughly $33,000.
The $7,312,283.36 payment settles the allegations without further litigation.
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