A group of wholesale steel distributors will pay more than $3.3 million to settle allegations that they made false statements in order to secure federal loans during the COVID-19 pandemic.

The seven corporations in question, each part of Georgia-based steel company Allied Crawford, are incorporated across seven separate states, including Virginia, where federal prosecutors investigated the matter.

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According to the Justice Department, they received more than $2.7 million combined in loans under the Paycheck Protection Program, which was designed to ensure that businesses could keep their doors open and continue paying their employees amid the pandemic. 

The companies, however, were actually ineligible to receive those loans, prosecutors claimed. They said company officials falsely certified that they were eligible for the loans — both on their initial applications, and on subsequent filings for the forgiveness of the loans in 2021.

The case began with a lawsuit filed by a whistleblower under the provisions of the federal False Claims Act; that whistleblower will receive a 10% share of the settlement.

The U.S. government reportedly allocated nearly $6 trillion in emergency spending during the pandemic, and although experts broadly agreed that the funding helped keep the economy afloat, it also created opportunities for fraud — investigations of which persist some six years later.

Prosecutors noted that the settlement does not include a determination of civil liability.

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