Arizona GPS company pays $2.6 million to settle false claims

PHOENIX — Hemisphere GNSS Inc., an Arizona-based manufacturer of satellite GPS, has agreed to pay $2.6 million to settle allegations that the company provided false information in an application for a Paycheck Protection Program loan, authorities said Wednesday.

The GPS company had applied for a second PPP loan in February 2021 based on certification that no entity from China owned 20% or more of the interest and that no Chinese representative was an active member of Hemisphere’s board of directors.

However, the U.S. Department of Justice for the District of Arizona alleged that both certifications were false and therefore the company was ineligible for the loan.

The PPP loan project was established by Congress in March 2020 as part of the Coronavirus Aid, Relief and Economic Security Act. The legislation authorized the distribution of billions of dollars in emergency aid to American businesses that needed to pay their employees and expenses.

“Legitimate PPP loans have saved small businesses across America,” U.S. Attorney Gary M. Restaino for the District of Arizona said in a press release. “But not everyone used the program as intended. Our office will continue to hold accountable the companies and individuals who abused the PPP program, as the settlement announced today reflects.”

The recent settlement includes the resolution filed under the whistleblower provisions of the False Claims Act, introduced by GNGH2 Inc. The entity will receive $260,000, or 10% of the total settlement.

The case was the result of a joint effort between the Civil Division, Commercial Litigation Division and Fraud Division of the U.S. Department of Justice, the Office of the U.S. Attorney for the District of Arizona, and the Office of General Counsel and Office of Inspector General of the Small Business Administration.