South Carolina Businesses Pay Millions To Settle PPP Fraud Claims

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by ERIN PARROTT

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South Carolina federal prosecutors have secured more than $7.9 million in settlements tied to alleged Paycheck Protection Program (PPP) fraud – part of a broader national crackdown targeting businesses accused of improperly obtaining pandemic-era relief funds.

On Thursday (May 28, 2026), U.S. attorney Bryan P. Stirling announced that the District of South Carolina reached multiple civil settlements with companies accused of violating the False Claims Act by providing false information to secure PPP loans for which they were allegedly ineligible.

According to a release from Stirling’s office, the settlements resolve allegations involving more than $5 million in PPP loans issued under the Coronavirus Aid, Relief, and Economic Security (CARES) Act – the massive federal relief package enacted during the COVID-19 pandemic.

“These settlements reflect our commitment to protecting taxpayers and holding those accountable who disregard program requirements in order to obtain federal funds they are not entitled to,” Stirling said. “Our team secured these settlements in the first five months of 2026 and we’ll continue to aggressively pursue individuals or businesses who defraud our taxpayers.”

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The PPP program, administered through the U.S. Small Business Administration (SBA), offered forgivable loans to qualifying businesses for payroll retention and approved operational expenses. To qualify, companies were required to certify that they met strict employee-count thresholds – including accounting for workers employed by affiliated parent companies and subsidiaries, even overseas.

Federal prosecutors allege several South Carolina-based companies understated their true employee totals by failing to include international affiliates tied to foreign parent corporations.

The companies include:

• EuWe Eugen Wexler US Plastics Inc., based in Williamston, agreed to pay $2.175 million after allegedly obtaining a $1.62 million second-draw PPP loan despite exceeding employee eligibility limits when its German parent company and subsidiaries were included.
• Charleston-based Mankiewicz Coatings, LLC agreed to pay $1.85 million over allegations it improperly secured a $1.22 million first-draw PPP loan while affiliated employee counts exceeded federal caps.
• Fukoku America, Inc., headquartered in Laurens, agreed to pay $1.8 million tied to allegations surrounding a $1.21 million second-draw loan involving undisclosed affiliates connected to its Japanese parent company.
• Spartanburg-based AWL Automation, LLC agreed to pay $1.1 million after allegedly receiving a $741,185 PPP loan despite exceeding employee limitations through affiliations with a Netherlands-based parent corporation.
• Stoba USA Corp., based in Charleston, agreed to pay nearly $994,000 tied to allegations involving a $683,695 second-draw PPP loan and undisclosed employee counts linked to its German parent company.

Several of the cases originated through qui tam lawsuits filed under whistleblower provisions of the False Claims Act – allowing private parties to sue on behalf of the federal government and receive a portion of any recovered funds.

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The settlements come amid an escalating nationwide push by the Trump administration to recover fraudulent pandemic-relief money. The release noted that the claims resolved by civil settlements are allegations only, and there has been no determination of liability.

On April 24, 2026, in coordination with the White House Task Force to Eliminate Fraud, the SBA announced it had referred approximately 562,000 suspected fraudulent loans to the U.S. Department of Treasury (USDT) for collection – the largest referral package in SBA history.

According to federal officials, the borrowers tied to those referrals accounted for roughly $22.2 billion in delinquent PPP and COVID Economic Injury Disaster Loan (EIDL) debt. The loans had reportedly already been flagged for suspected fraud during the Biden administration but were never referred to Treasury for collection or to the U.S. Department of Justice (USDOJ) for investigation.

Federal authorities have increasingly focused on pandemic fraud enforcement nationwide as investigators continue unraveling abuse tied to trillions of dollars in emergency COVID-era spending programs.

The South Carolina investigations were led by assistant U.S. attorneys Austin E. McCullough and James C. Leventis Jr., with assistance from the SBA Office of General Counsel.

Count on FITSNews to continue tracking major fraud investigations and federal enforcement actions tied to pandemic relief programs across the Palmetto State.

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ABOUT THE AUTHOR…

Erin Parrott is a Greenville, S.C. native who graduated from the University of South Carolina in 2025 with a bachelor degree in broadcast journalism. Got feedback or a tip for Erin? Email her here.

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