Setterstix Inc. is a manufacturer best known for producing paper sticks used in food and medical products. The company has agreed to pay $1,757,603.65 to resolve federal allegations that it improperly obtained a $571,862 Paycheck Protection Program (PPP) loan.
The settlement was announced by the U.S. Attorney’s Office for the Western District of New York.
DOJ Targeted Setterstix Over PPP Eligibility
The Paycheck Protection Plan (PPP) program required applicants to certify that they met strict criteria, including:
- U.S.-based operations
- Domestic control or qualifying ownership structures
- Adherence to SBA size standards and affiliation rules
Federal prosecutors allege Setterstix did not meet those requirements. PPP loans were disbursed based on self-certifications. Any inaccurate or misleading statement, whether intentional or not, can constitute a “false claim” under 31 U.S.C. § 3729.
The DOJ‘s intervention shows the Trump Administration’s continued strategy. They use the False Claims Act to recover pandemic-era financial relief.
Treble Damages: How a PPP Loan Tripled in Cost
Under the False Claims Act, companies may be liable for:
- Treble damages (three times the government’s loss)
- Civil penalties assessed per false claim
- Mandatory repayments of improperly obtained funds
In this case, the government sought more than just the original loan amount.
ProPublica Data Confirms Loan Fraud
The ProPublica PPP database shows:
- Loan Amount: $571,862
- Date Approved: April 8, 2020
- Industry: Manufacturing
- Program: First-draw PPP loan
How Find Corporate Waste (FCW) Uncovers Cases Like Setterstix
At Find Corporate Waste (FCW), we specialize in identifying the discrepancies that led to the $1.76 million settlement with Setterstix Inc.
Our investigation model is built on cross-referencing databases the government maintains but fails to connect. We aim to detect patterns that suggest fraud, waste, and abuse.
These cases are not rare, they are actually just a symptom of the broader pattern of pandemic relief fraud. For more information about these cases, or to report potential waste of federal funds, reach out to info@findcorporatewaste.com and be sure to subscribe.
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