An Orlando resort company with a location in Crystal River has agreed to pay $325,000 to settle allegations that it accepted COVID-19 paycheck loans and lied about using them to play employees.
Kingwood Orlando Reunion Resort, which is located at 7593 Gathering Drive in Kissimmee, has agreed to settle allegations that the company violated the False Claims Act (FCA) and the Financial Institution Reform, Recovery, and Enforcement Act (FIRREA), according to a statement issued by the U.S. Attorney’s Office for the Middle District of Florida.
The company allegedly provided false information in support of a Paycheck Protection Program loan forgiveness application submitted by its sister company in Crystal River.
According to court records, the company received separate PPP loans for both of its resorts. The federal government says that the Crystal River location sought forgiveness of its PPP loan, in-part, by “certifying that it used a portion” of the loan to pay wages of its employees.
Some of those employees that it claimed to have paid wages were actually employed at the Orlando location and were not employed or paid by the Crystal River resort.
As part of the settlement, the resorts agreed to pay $271,720 in damages and penalties under the FCA, and an additional $53,280 in civil penalties under the FIRREA.
The settlement resolves a lawsuit that was filed under a whistleblower provision of the FCA, which permits private parties to file suit on behalf of the U.S. for false claims. Those who do are entitled to share in a portion of the government’s recovery.
Court records show that the lawsuit in this case was filed by the former Director of Human Resources for Kingwood resorts.
Created by Congress in March 2020 as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, when applying for forgiveness of PPP loans, borrowers were required to certify the truthfulness and accuracy of all information provided in their applications. A PPP recipient seeking loan forgiveness based on the payment of wages was only entitled to forgiveness for the amount of wages actually paid to its employees during the designated period.