Parsippany PR firm will pay $2M to resolve claims it fraudulently obtained PPP loans (updated)

Kimberly Redmond//April 4, 2023//

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A Parsippany-based public relations firm has agreed to pay back $2.24 million in COVID-19 relief funds that authorities allege it fraudulently obtained through the Paycheck Protection Program (PPP).

As part of the settlement announced April 3 by the U.S. Attorney’s Office, District of New Jersey, Coyne Public Relations LLC of Parsippany will also give $203,183 to a whistleblower who filed a lawsuit in December 2021 under the False Claims Act alleging the firm received improper PPP loans.

Created by Congress in March 2020 as part of the Coronavirus Aid, Relief and Economic Security (CARES) Act, the PPP authorized billions of dollars in forgivable loans to small businesses struggling to pay employees and other operating expenses.

According to the U.S. Attorney’s Office, the firm knowingly applied for and secured $2 million between February 2021 and October 2021, even though the business was ineligible for funding based upon its status as a required registrant under the Foreign Agent Registration Act (FARA). It then sought and received forgiveness of the total amount of the loan, authorities said.

The agreement is neither an admission of liability by Coyne nor a concession by federal authorities that the claims are not well-founded, the agreement notes; however, U.S. Attorney Phillip Selinger said that the firm “fully cooperated in the investigation and resolution” of the matter.

In a statement to NJBIZ, Tom Coyne, CEO of Coyne PR, said the firm was notified by the Department of Justice in August 2022 that its PPP application was being investigated due to a lawsuit filed by a serial relator. According to Coyne, the application “asked if we needed to file a registration statement with the Foreign Agents Registration Act, and we answered no.”

“As a longtime FARA registrant, we were well aware of the distinction between a registration statement and a supplemental statement. Based on our awareness of that fundamental statutory distinction, we believe that our response to the relevant application question was accurate in all respects because, during the pandemic, we did not undertake any new work that triggered a FARA registration obligation,” Coyne said.

“The PPP legislation did not account for this basic distinction between a registration statement and a supplemental statement, rendering the application, at best, ambiguous in our view. Coyne repaid the monies to resolve the matter amicably with no admission of wrongdoing. Still, we are grateful for the PPP loan assistance during the pandemic. We initially received forgiveness following an audit from both the SBA and banking institutions and were surprised when contacted by the DOJ and continue to respect the service they provide,” he added.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form.

Editor’s note: This story was updated at 2:31 p.m. ET April 4, 2023, to include a statement from Coyne Public Relations.