Vehicle dealership sued in federal court
A vehicle dealership is being sued in federal court for allegedly inappropriately receiving between $4.6 million and $11.1 million in Coronavirus Aid, Relief and Economic Security Act (CARES Act) to provide emergency relief to small businesses facing payroll difficulties.
Blaise Alexander Dealerships is named as a defendant in civil litigation unsealed in U.S. Middle District Court Friday.
The lawsuit alleges the dealership applied for and received at least 13 separate paycheck protection program loans, spent the payroll funds as required and then allegedly made its salespersons reimburse the Small Business Association for these funds by withholding their sales commissions.
The lawsuit was filed by Branden Bucher, acting as “relator” for the government’s case. Bucher, since 2018, has been a salesman for the dealership at Sunbury, according to the lawsuit.
The lawsuit alleges the dealership wasn’t eligible for such loans due to regulations prohibiting loans to businesses of its size. As such, Bucher and his attorneys allege the dealership committed a violation of the False Claims Act.
The act reflects the government’s ability to recover losses as a result of alleged fraud, Bucher said. The allegations by Bucher include presentation of false claims, false record or statement and avoiding obligation.
Alexander listed loans in its dealership that helped to retain 737 jobs.
The dealership has more than 1,200 employees across 19 locations in the state, according to the suit.
Congress passed the Coronavirus Aid, Relief and Economic Security Act (CARES Act) to provide emergency relief to small businesses facing payroll difficulties.
The act was passed on March 27. It empowered the Small Business Administration to make loans to eligible small businesses under the paycheck protection program. The purpose was to keep workers paid and employed. The business is eligible if it employs not more than 500 employees, the suit said.
In response to the allegations contained in the lawsuit, Joel Breneman, director of operations for the dealership, said the lawsuit was “frivilous.”
“I can confidently say that these allegations are false and this is an attempt by an individual to benefit from a frivilous suit,” Breneman said.
The dealership followed guidance from the Pennsylvania Automotive Association and PNC Bank, he said.
The guidance was to ensure the dealership met all qualifications and the funds were used properly, Breneman said.
The paycheck protection program loan program allowed the dealership to bring back all of its employees at their normal pay, even during a time of heavy restrictions on automotive dealerships under Gov. Tom Wolf’s orders, Breneman said.
“At no time was any employee asked to return wages that they received,” he said.
U.S. Middle District Court Judge Matthew W. Brann said he has scheduled a case management telephone conference with the attorneys in the case. Bucher and his attorneys are demanding a jury trial.