Fremont Company To Pay Nearly $1M In PPP Loan Fraud Settlement

FREMONT, CA — A Fremont-based company has agreed to settle a lawsuit accusing them defrauding the government by applying for and obtaining Paycheck Protection Program loans during the COVID-19 pandemic, authorities said.

Innodisk USA applied for the PPP loan, which was created during the pandemic as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, on March 17, 2021, despite not being eligible.

Subscribe

The company, according to the United States Attorney's Office, Northern District of California, exceeded the "requisite size standards" and had not experienced the necessary revenue reduction.

"Applicants for a 'second-draw' PPP loan were required to certify, among other things, that they, together with their affiliates, employed no more than 300 employees and that they had a decrease in gross receipts in excess of 25 percent compared to an earlier time period," authorities said. "Despite knowing that it was not eligible for the second-draw loan, Innodisk USA sought and obtained forgiveness of the loan."

On Monday, authorities announced Innodisk had agreed to ay $950,000 to settle the lawsuit.

Innodisk USA is a subsidiary of Innodisk Corporation, a multinational Taiwanese company. They produce industrial embedded flash and DRAM memory products and technologies.

The CARES Act PPP loan program was meant to help provide financial stability to Americans impacted by the COVID-19 pandemic.