Valve Maker Pays $774,812 To Settle PPP Loan Fraud Claims

Carten-Fujikin Inc. will pay $774,812.51 to the federal government to resolve claims that it wrongly received a $500,000 loan during the pandemic. The settlement was announced by U.S. Attorney Benjamin L. Wallace for the District of Delaware. The company operates as a Delaware corporation with its main business location in Cheshire, Connecticut.

Federal officials stated that the firm did not qualify for the Paycheck Protection Program because its workforce was too large. The company and its related entities employed more than 300 people. This number exceeded the limit for the second round of funding. The company also failed a geographic test regarding its overseas operations.

Carten-Fujikin manufactures valve products and gas systems for the semiconductor industry. It is wholly owned by Fujikin of America Inc. That parent company is owned by Fujikin Incorporated, a Japanese firm. Fujikin Japan operated multiple sites in China through a subsidiary named Fujikin of China Incorporated.

The loan was issued in late January 2021. It came from the program's second round of funding. Congress created this round with stricter rules than the initial March 2020 offering. Businesses had to certify that they had no more than 300 employees across all domestic and foreign affiliates. They also had to confirm that no owner holding a 20 percent stake had major operations in China or Hong Kong.

Despite these rules, Carten-Fujikin received the loan on or about January 28, 2021. The loan was later forgiven. The settlement resolves civil allegations against the company. It does not create a judicial finding of liability. The case also included a whistleblower lawsuit under the False Claims Act. A private individual brought the claim on behalf of the government and will receive an unspecified share of the money recovered.

The Department of Justice continues to monitor fraud related to pandemic relief. Officials encourage people with information to contact the National Center for Disaster Fraud. The center can be reached by phone at 866-720-5721 or via an online form.