Restaurant chain CoreLife Eatery ordered to pay $7.8 million in penalties for committing fraud related to pandemic relief funds.
A fast-casual restaurant chain, CoreLife Eatery, has agreed to pay a settlement of $7.8 million to resolve allegations of fraud involving pandemic relief programs. The case, United States ex rel. Howitt v. CoreLife Eatery, LLC, et al., No. 3:24-cv-0263 (N.D.N.Y.), was led by the Department of Justice and several other agencies.
According to the settlement, CoreLife Eatery falsely claimed eligibility for a Restaurant Revitalization Fund (RRF) grant, a programme created under the American Rescue Plan Act in 2021 to help small businesses recover from the COVID-19 economic downturn. The company, which owned and operated 29 locations by March 13, 2020, was not eligible for RRF grants as businesses with more than 20 locations were ineligible.
Despite this, CoreLife submitted an application in May 2021, falsely certifying that it met the eligibility requirement. The managing member of the company explicitly stated that they had less than 20 locations, a claim that was later found to be false.
The settlement includes a whistleblower award of over $1.17 million to the individual who initiated the lawsuit under the False Claims Act. The award serves as a reminder of the Department of Justice's commitment to enforcing the False Claims Act and recovering taxpayer money lost to fraud.
The investigation into CoreLife Eatery's fraudulent claims was conducted by the U.S. Attorney's Office for the Northern District of New York, the SBA Office of Inspector General, and the SBA Office of General Counsel. The SBA Office of Inspector General's Eastern Region's Special Agent in Charge, Amaleka McCall-Brathwaite, stated that wrongfully obtaining taxpayer dollars will not go unnoticed.
The settlement in the CoreLife Eatery case is part of a broader effort to hold businesses accountable for fraud involving pandemic relief programs. The case is a reminder of the ongoing efforts to protect federal funds from fraudulent activities and to ensure that relief funds are distributed fairly to those who truly need them.
This settlement marks a significant step in upholding the integrity of pandemic relief programmes and maintaining public trust in these vital initiatives. The Department of Justice, along with other agencies, remains committed to enforcing the law and protecting taxpayer dollars from fraudulent activities.
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