Source: United States Department of Justice News
Company Enters into 3-Year Deferred Prosecution Agreement and False Claims Act Settlement to Resolve Criminal and Civil Liability; Individual Owners Agree to Pay Additional $250,000 Penalty to Resolve Individual False Claims Act Liability
Richland, Washington – Vanessa R. Waldref, the United States Attorney for the Eastern District of Washington, announced today that HPM Corporation (HPMC) and its owners have agreed to pay $2,939,400 in restitution and penalties and to undertake additional responsibilities to resolve HPMC’s criminal and civil liability in connection with a fraudulent Paycheck Protection Program (PPP) loan. The announced settlement also resolves the individual False Claims Act liability of HPMC’s owners and executives Holly and Grover Cleveland Mooers, who agreed to pay an additional $250,000 penalty from their own funds as part of the settlement.
HPMC is a Department of Energy (DOE) contractor that provides occupational health services for DOE and contractor employees at DOE’s Hanford Site. In April 2020, HPMC applied for and received a $1,344,700 PPP loan. Congress created the PPP in March 2020 as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, in order to provide funding to small businesses in order to mitigate the economic impacts of the COVID-19 pandemic for small and local businesses. PPP loans were fully guaranteed by the United States, and the U.S. Small Business Administration (SBA) may grant a small business borrower forgiveness so long as the loan proceeds have been used for payroll and other eligible expenses.
As part of the global criminal and civil settlement, HPMC and the Mooers admitted that they knowingly provided materially false statements to the SBA in support of HPMC’s application for forgiveness of the PPP by falsely stating that the PPP loan proceeds had been used for payroll and other eligible expenses when they had not been. HPMC and the Mooers further admitted that, through the materially false representations, they induced SBA to grant forgiveness for the loan. Finally, HPMC and the Mooers admitted that after causing the SBA to grant forgiveness for the loan based on these materially false statements, the Mooers transferred the entire loan amount from an HPMC business account to the Mooers’ personal account.
As part of the global resolution, HPMC has agreed to pay $2,689,400 in restitution and penalties, as well as a 3-year probationary period following the filing and during the deferral of federal criminal charges in which it may not commit any further criminal or civil offenses, and must immediately report any credible evidence of any such violations to the United States. Additionally, the Mooers have agreed to pay an additional $250,000 civil penalty, which must come from their personal funds and may not come from HPMC funds. Grover Cleveland Mooers has also agreed to step down as a Governor of HPMC, and not serve as a principal employee, manager, or advisor for HPMC during the three-year deferral period. HPMC has also agreed to, at its own expense, retain an independent accounting or auditing firm to perform an independent audit of HPMC’s accounting practices as they relate to expenses, distributions, dividends, salaries, and expenses to the Mooers or any other HPMC officers, owners, or shareholders.
U.S. Attorney Waldref stated: “COVID relief funding is a precious and limited resource. These funds were intended to help small and local businesses and keep the communities of Eastern Washington safe and strong, not to line the pockets of millionaire owners. I want to especially commend the exceptional investigative work performed by DOE’s Office of Inspector General and SBA’s Office of Inspector General. Our office will continue to work with our law enforcement partners to vigorously pursue fraud against COVID relief funding and hold accountable individuals and companies that misuse that funding.”
“Lying to gain access to SBA’s pandemic response programs is not without consequence,” said SBA OIG’s Western Region Special Agent in Charge Weston King. “Our office will aggressively pursue evidence of wrongdoing and bring those responsible to justice. I want to thank the U.S. Attorney’s Office and our law enforcement partners for their dedication and pursuit of justice.”
“Stealing money from pandemic relief funds is reprehensible,” said Teri L. Donaldson, Inspector General, Department of Energy. “Anyone engaging in COVID fraud should think twice. The federal law enforcement community actively investigates and prosecutes pandemic relief fraud, and will not hesitate to seek significant criminal and civil penalties.”
This case was investigated as part of the U.S. Attorney’s Office COVID-19 Fraud Strike Force, an interagency team of federal law enforcement agencies dedicated to combatting COVID relief fraud in Eastern Washington. The HPMC case was investigated by the U.S. Attorney’s Office for the Eastern District of Washington, DOE OIG’s Richland Field Office, and SBA OIG’s Seattle Field Office. Special Assistant United States Attorney Frieda K. Zimmerman and Assistant U.S. Attorneys Dan Fruchter and Tyler H.L. Tornabene of the Eastern District of Washington handled this matter on behalf of the United States.