YAPP USA Automotive Systems, Inc., a subsidiary ultimately owned by the Chinese government, has agreed to pay $14,208,496 to the United States. This agreement settles allegations that it improperly obtained and retained a Paycheck Protection Program (PPP) loan. These actions were in violation of the False Claims Act.
The case was brought to light through a qui tam lawsuit filed under the False Claims Act by GNGH2 Inc., a private entity acting in the public interest.
The whistleblower will receive $1,420,849 as a reward for its role in exposing the misconduct.
Find Corporate Waste is dedicated to recovering taxpayer money. These funds were given to foreign owned businesses. This occurred while Americans struggled to make ends meet during the pandemic.
If you have information relating to potential False Claims Act violations, we are here to help you file your complaint. We aim to restore trust and accountability to the American procurement system.
Rahul Shah, 56, of Evanston, Illinois, is facing decades in federal prison after being convicted for orchestrating a multi-million-dollar bank fraud and COVID-19 relief scam in which he defrauded financial institutions out of more than $55 million in commercial loans and PPP funds.
Shah operated several information technology companies in the Chicago area and submitted fake documents to secure the funds.
According to prosecutors, Shah falsified bank records, inflated revenues on financial statements, and forged audit reports to deceive federally insured lenders. He defaulted on several of the loans, leaving taxpayers on the hook.
The fraud didn’t stop there. During the height of the COVID-19 pandemic, Shah filed bogus applications for Paycheck Protection Program (PPP) loans—falsely inflating payroll figures and submitting counterfeit IRS forms. Authorities say he also used stolen identities and tax information to qualify for pandemic aid, a tactic that earned him additional charges for aggravated identity theft.
The evidence showed that the payroll numbers submitted to lenders were drastically higher than those reported to federal and state tax agencies. Investigators also found that the IRS forms Shah submitted had been doctored to mislead banks about his companies’ eligibility for SBA-backed loans.
The jury returned a conviction on 16 counts, including:
5 counts of making false statements to financial institutions
2 counts of money laundering
2 counts of aggravated identity theft
Shah is set to be sentenced on November 13, and he faces up to:
30 years for each bank fraud and false statement count
10 years for each money laundering count
2 years for each aggravated identity theft count
The case was investigated by the FBI Chicago Field Office and the Small Business Administration Office of Inspector General (SBA OIG). It was prosecuted by the DOJ’s Criminal Division Fraud Section and the U.S. Attorney’s Office for the Northern District of Illinois.
This conviction adds to a growing list of pandemic-related prosecutions. Since the CARES Act was passed, the DOJ has recovered more than $78 million in stolen PPP funds.
Know something? If you have firsthand knowledge about PPP fraud or government contracting abuse, Find Corporate Wasteencourages you to come forward. You can report potential COVID-19 fraud directly to the National Center for Disaster Fraud.
In a decisive action against pandemic relief fraud, Zund America, Inc., based in Oak Creek, Wisconsin, has agreed to pay $2.3 million to resolve allegations it falsely certified eligibility for a federal Paycheck Protection Program (PPP) loan. The investigation was prompted by a whistleblower complaint under the False Claims Act (FCA), once again affirming the critical role private citizens play in holding corporations accountable.
In February 2021, Zund America received a second-draw PPP loan—a type of loan restricted to businesses with 300 or fewer employees, including their affiliates. However, Zund America is owned by Zund Holding AG, a Swiss parent company with a global network of 19 affiliated entities, collectively employing well over that limit.
Despite these clear affiliations, Zund America certified its eligibility and received taxpayer-backed funds. The Small Business Administration (SBA) later repaid the loan, effectively passing the cost to American taxpayers.
This case might have gone unnoticed if not for a qui tam complaint filed under the False Claims Act by GNGH 2, Inc., a whistleblower entity. Qui tam provisions allow private parties to sue on behalf of the U.S. government and receive a portion of the recovery. As a result of the whistleblower’s tip, the government recovered the full loan amount plus penalties.
The case, filed as United States ex rel. GNGH 2, Inc. v. Zund America, Inc. (No. 24-cv-0661), was prosecuted in the Eastern District of Wisconsin, with Assistant U.S. Attorney Michael Carter representing the government.
AtFind Corporate Waste, we shine a light where others look away—because every stolen dollar is a theft from the American people, and we’re here to take it back.
