Peachtree City Oil Re-Refinery Operator Settles PPP Fraud Claims for $2.6 Million

Universal Environmental Services, LLC, the company that operates the oil re-refinery in Peachtree City, has agreed to pay $2.6 million to resolve federal allegations that it provided incorrect information while seeking forgiveness of a COVID-era Paycheck Protection Program loan.

The U.S. Attorney’s Office for the Northern District of Georgia announced the civil settlement involving UES, a Peachtree City-based subsidiary of Avista Oil Group, which federal officials described as a large German conglomerate.

“When people provide false information to obtain government-backed loans, they break the law and misdirect resources away from those who need them,” U.S. Attorney Theodore S. Hertzberg said. “Our office will continue to enforce the False Claims Act to recover such funds, plus penalties.”

The government’s investigation began after a whistleblower filed a complaint alleging that UES applied for a second-draw PPP loan in 2020.

Second-draw loans were limited to qualifying small businesses. According to the U.S. Attorney’s Office, the program rules and loan application defined an eligible business as one with fewer than 300 employees, including employees throughout the applicant’s corporate family.

Federal officials alleged that UES reported having 287 employees on its loan application. That figure included only the company’s domestic employees and did not include employees from the broader Avista Oil Group corporate family, according to the release.

The entire corporate family employed well over 300 people, federal officials said.

Based on the employee count provided by UES, a bank approved an approximately $2 million PPP loan. The Small Business Administration later paid off the loan at taxpayers’ expense after it was forgiven, according to the U.S. Attorney’s Office.

The $2.6 million settlement resolves the government’s allegations under the False Claims Act, a federal law that allows the government to recover money connected to fraudulent claims for federal funds.

The claims resolved through the settlement are allegations only, and there has been no determination that UES is liable for the alleged conduct.

The case was brought under the False Claims Act’s qui tam, or whistleblower, provisions. Those provisions allow private citizens or entities to file lawsuits on behalf of the United States involving alleged false claims and to receive a portion of any money recovered by the government.

The whistleblower in the UES case, Verity Investigations LLC, will receive $312,000 from the settlement. UES will also pay the whistleblower’s attorney fees.

The settlement resolves a lawsuit filed in the U.S. District Court for the Northern District of Georgia. The case is United States ex rel. Verity Investigations LLC v. Universal Environmental Services, LLC, No. 3:24-cv-00109-LMM.

Assistant U.S. Attorney Anthony DeCinque handled the investigation and resolution of the case. Former Special Assistant U.S. Attorney Nicole Karem also participated, with assistance from the SBA’s Office of General Counsel.

The Department of Justice continues to accept reports of suspected fraud involving COVID-19 pandemic assistance programs through the National Center for Disaster Fraud and the SBA Office of Inspector General.