Two prominent Rochester-area entities are accused of falsely applying for and receiving millions of dollars in small-business loans during the COVID-19 pandemic.
A newly unsealed federal complaint accuses Mary Catherine “Kitty” Van Bortel of withholding information that would have made her car dealerships ineligible for loans under the federal Paycheck Protection Program. Four dealerships under the Van Bortel Automotive Group received a collective $7.3 million in federal aid between 2020 and 2021.
In a text message July 10 to the Democrat and Chronicle, Van Bortel denied any allegations of fraud. The complaint is a “scam” and her attorneys are looking into it, Van Bortel said.
“I’m beside myself,” she said. “I would NEVER do anything fraudulent.”
The complaint, first reported by the Rochester Business Journal, was made public the same day federal authorities announced a separate settlement with the Genesee Valley Club, which received a $705,000 PPP loan in 2021. The U.S. Attorney’s Office argued private social clubs were ineligible for the federal relief loans.
The Genesee Valley Club agreed to pay $1.05 million to resolve those allegations, including false claim allegations.
Club President Tom Hildebrandt issued a statement when contacted by the Democrat and Chronicle July 10.
“The Genesee Valley Club confirms that it will repay its Paycheck Protection Program (PPP) loan, which was approved and forgiven by the government in error in 2021, as part of a settlement agreement with the U.S. Department of Justice,” the statement said. “The Club anticipates no impact to its operations or employees. Any additional questions should be addressed to the DOJ.”
Feds pursuing claims of PPP loan fraud
At the height of the pandemic, federal officials approved 11.5 million loans totaling nearly $800 billion. The loans were low-interest or forgivable, and funds were meant to help small businesses survive shutdowns and the economic downturn experienced during the pandemic. A federal task force is now reviewing suspected fraud cases tied to the program.
“The Paycheck Protection Program was designed to support small business during the COVID-19 Pandemic,” U.S. Attorney Michael DiGiacomo said in a statement. “As evidenced by the numerous settlements we have obtained involving PPP loans, this office continues to work tirelessly to recover taxpayer dollars that were improperly obtained by ineligible entities.”
A private entity ― not the U.S. government ― however, is pursuing the complaint against the Van Bortel group.
It was filed under seal in October 2024 by PPP Eligibility Experts LLC, a California firm that investigates potential fraud. Federal law allows private groups to pursue false claims lawsuits on behalf of the government in exchange for a cut of any recovered funds.
The Van Bortel complaint was unsealed this week at the request of federal authorities after the U.S. Attorney’s Office declined to intervene.
The complaint alleges the Van Bortel Automotive Group did not report the collective size of the enterprise when applying for individual PPP loans for several dealerships. Program rules limited the aid to new car dealership groups with fewer than 200 employees, according to the complaint.
Considered together, the loan applications listed 398 employees across four Van Bortel dealerships during the first wave of funding in 2020. A second round of loan applications in 2021 listed a collective 377 employees.
“Defendants knowingly made false statements about their size when they did not identify or otherwise provide information on all affiliated entities in their PPP loan applications,” the complaint reads. “Without these false statements, the United States would not have provided defendants with the millions of dollars in PPP loans the defendants received.”
— Kayla Canne covers community safety for the Democrat and Chronicle with a focus on immigration, police accountability, government surveillance and how people are impacted by violence. Follow her on Instagram @bykaylacanne. Get in touch at kcanne@gannett.com.
This article originally appeared on Rochester Democrat and Chronicle: Van Bortel dealerships accused of getting $7.3M in improper PPP loans
Reporting by Kayla Canne, Rochester Democrat and Chronicle / Rochester Democrat and Chronicle
USA TODAY Network via Reuters Connect
By Kayla Canne, Rochester Democrat and Chronicle | USA TODAY Network
