LaFontaine Automotive Group entity agrees to $1.5 million settlement

MID-MICHIGAN (WJRT) – LaFontaine Management Inc. has agreed to pay $1.5 million for allegedly obtaining Paycheck Protection Program grants the business was not eligible to receive.

U.S. Attorney Jerome F. Gorgon Jr. announced the settlement Wednesday in a case that involved allegations of violating the federal False Claims Act.

LaFontaine Management, which is affiliated with the statewide automotive dealership network across Michigan, made false statements to the U.S. Small Business Administration to obtain a Paycheck Protection Program loan.

The COVID-19 era Paycheck Protection Program was created in March 2020 to help American businesses with forgivable loans.

The LaFontaine Automotive Group includes Ford and Lincoln dealerships in Mundy Township and a Ford dealership in Birch Run.

In April 2020, LaFontaine Management secured a $1 million loan by allegedly certifying false eligibility with more than 500 employees and not operating as a franchise.

“Even though the PPP Program has ended, our mandate to investigate and redress the harm from fraudulent and improper PPP loans continues,” said Gorgon.

The settlement resolves a lawsuit filed under the False Claims Act’s whistleblower provisions, allowing private individuals to file suit on behalf of the U.S. and share in the recovery.

LaFontaine Automotive Group issued a statement Wednesday evening, saying the company repaid the $1 million loan in full after learning that “eligibility requirements were being interpreted differently than it had been originally advised.”

“The circumstances giving rise to this matter occurred during the earliest phase of the PPP program, when federal guidance was rapidly evolving and key eligibility terms lacked clear definitions. Specifically in this instance, guidelines on how to account for affiliated entities,” the statement says.

LaFontaine said it used the money according to the government’s intended purpose and there were no allegations of the company misspending any of the Payroll Protection Program funds.

“LaFontaine Automotive Group remains committed to conducting its operations in accordance with all applicable laws and regulations and continues to uphold the standards of integrity and compliance expected by our customers, employees, and business partners,” the statement says. “LaFontaine Automotive Group expressly denies any liability, wrongdoing, fraud, or misrepresentation.”