Durst Image Technology Pays $1.8 Million to Settle False Claims Act Lawsuit

Durst Image Technology to Pay $1.8 Million in PPP Fraud Settlement

The U.S. Department of Justice has reached a $1.8 million settlement with Durst Image Technology US LLC over allegations that the company violated the False Claims Act by improperly obtaining a Paycheck Protection Program loan during the COVID-19 pandemic.

The settlement stems from a whistleblower lawsuit filed under the False Claims Act’s qui tam provision. According to the complaint, Durst received and subsequently had forgiven a PPP loan for which it was ineligible due to exceeding the program’s size requirements for second-draw loans.

Congress established the Paycheck Protection Program in March 2020 as part of its emergency response to help businesses weather financial hardships caused by the pandemic. The program, administered by the U.S. Small Business Administration, provided government-guaranteed loans to eligible small businesses. A key eligibility criterion for both first and second-draw loans was that applicants have 300 or fewer employees, including any workers at foreign affiliates.

“When companies fail to comply with the size and eligibility rules, this office is committed to recovering taxpayer dollars that were improperly obtained and spent,” said U.S. Attorney Michael DiGiacomo in a statement regarding the case.

The Justice Department alleged that Durst, a subsidiary of Durst Group AG based in Brizen, Italy, applied for and received a second-draw PPP loan in 2021 despite the fact that Durst Group AG and its worldwide affiliates collectively employed more than 300 people at the time of the application.

The Durst case highlights the government’s continued scrutiny of potential fraud in pandemic relief programs. The PPP disbursed nearly $800 billion in forgivable loans to small businesses between 2020 and 2021, and federal authorities have been aggressively pursuing cases of suspected program abuse since its inception.

Financial industry experts note that PPP fraud investigations have intensified as the program wound down, with particular focus on companies that misrepresented their eligibility criteria or employee counts to qualify for funds.

The False Claims Act has proven to be a powerful tool in the government’s efforts to combat pandemic relief fraud. The law’s qui tam provisions enable private citizens with knowledge of fraud against government programs to file lawsuits on behalf of the United States and share in any financial recovery.

In accordance with these provisions, the whistleblower who brought Durst’s alleged violations to light will receive a portion of the $1.8 million settlement, though the exact amount has not been disclosed.

The Justice Department emphasized that the settlement resolves allegations only, and there has been no determination of liability in the case. Durst Image Technology agreed to the settlement without admitting wrongdoing.

This case reflects broader trends in pandemic relief oversight, as federal agencies continue to investigate and prosecute alleged fraud related to emergency assistance programs. Since 2020, the Justice Department has recovered hundreds of millions in fraudulently obtained pandemic relief funds through settlements and judgments.

Industry analysts suggest that companies that received pandemic assistance should thoroughly review their applications and documentation, as investigations into PPP fraud are expected to continue for years to come.

The settlement also underscores the critical role whistleblowers play in identifying potential fraud against government programs, particularly during crises when large sums of federal money are disbursed quickly to address pressing economic needs.