Detroit, Michigan, December 12, 2025
LaFontaine Management Inc., associated with the LaFontaine Automotive Group, has agreed to a $1.5 million settlement due to allegations of falsely certifying its eligibility for a $1 million PPP loan. Prosecutors alleged the company misrepresented employee count and franchise status to secure funding, which it denies. The case highlights ongoing issues surrounding PPP fraud as investigations continue into improper loan certifications.
Detroit, Michigan – LaFontaine Management Inc. Agrees to $1.5 Million Settlement Over PPP Loan Misrepresentation
LaFontaine Management Inc., the management company affiliated with the LaFontaine Automotive Group in Metro Detroit, has agreed to pay $1.5 million to settle allegations of falsely certifying its eligibility for a Paycheck Protection Program (PPP) loan. Federal prosecutors claimed that the company misrepresented its employee count and franchise status to obtain a $1 million COVID relief loan in April 2020, despite being ineligible under PPP guidelines. The settlement resolves claims that LaFontaine Management violated the False Claims Act by making false statements to the U.S. Small Business Administration (SBA) to secure the loan. The company denies any wrongdoing.
Details of the Allegations
In April 2020, LaFontaine Management obtained a first draw PPP loan for $1 million. The United States alleged that the company falsely certified its eligibility for the loan and loan forgiveness, even though, together with its affiliates, it had more than 500 employees and was not operating as a franchise with a franchise identifier code from the SBA, in violation of the PPP rules.
Background on the Paycheck Protection Program
Congress established the PPP in March 2020 to provide emergency financial assistance to American businesses affected by the COVID-19 pandemic. The program offered forgivable loans to eligible small businesses to help retain their workforce during the economic downturn. Eligibility criteria included limitations on the number of employees and restrictions for certain types of businesses operating as franchises. Borrowers were required to certify the accuracy of all information provided in their loan applications.
Ongoing Efforts to Address PPP Fraud
Despite the conclusion of the PPP, the U.S. Attorney’s Office continues to investigate and address fraudulent and improper PPP loans. The Department of Justice encourages individuals with information about COVID-19 relief fund fraud to report it by calling the National Center for Disaster Fraud Hotline.
Frequently Asked Questions (FAQ)
What is the Paycheck Protection Program (PPP)?
The PPP was a federal initiative established in March 2020 to provide forgivable loans to small businesses affected by the COVID-19 pandemic, aiming to help them retain their workforce during economic hardships.
What were the allegations against LaFontaine Management Inc.?
LaFontaine Management Inc. was alleged to have falsely certified its eligibility for a $1 million PPP loan by misrepresenting its employee count and franchise status, despite being ineligible under PPP guidelines.
What is the False Claims Act?
The False Claims Act is a federal law that imposes liability on individuals and companies who defraud governmental programs. It allows private individuals to file actions on behalf of the government and share in any recovered damages.
How can individuals report PPP loan fraud?
Individuals with information about PPP loan fraud can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline.
Key Features of the Case
| Feature | Details |
|---|---|
| Company Involved | LaFontaine Management Inc. |
| Settlement Amount | $1.5 million |
| Allegations | False certification of eligibility for a $1 million PPP loan |
| Loan Date | April 2020 |
| Program | Paycheck Protection Program (PPP) |
| Regulatory Body | U.S. Small Business Administration (SBA) |
| Legal Framework | False Claims Act |
| Settlement Denial | Company denies any wrongdoing |
| Reporting Fraud | National Center for Disaster Fraud Hotline: 866-720-5721 |
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Author: STAFF HERE DETROITMI WRITER
DETROIT STAFF WRITER The DETROIT STAFF WRITER represents the experienced team at HEREDetroitMI.com, your go-to source for actionable local news and information in Detroit, Wayne County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as Movement Electronic Music Festival, Detroit Grand Prix, and America's Thanksgiving Parade. Our coverage extends to key organizations like the Detroit Regional Chamber and Focus HOPE, plus leading businesses in automotive and healthcare that power the local economy such as General Motors, Ford Motor Company, and Henry Ford Health. As part of the broader HERE network, including HEREGrandRapids.com, HERENorthville.com, HERENovi.com, and HEREPlymouth.com, we provide comprehensive, credible insights into Michigan's dynamic landscape.
