Chinese-Owned Company Settles for $11.77 Million Over False PPP Loan Claims
(Washington, D.C. = Alex Walczak) Continental Aerospace Technologies Inc., a Chinese-owned aircraft engine and parts manufacturer, has agreed to pay $11.77 million to resolve allegations of fraudulently obtaining a Paycheck Protection Program (PPP) loan, according to the U.S. Department of Justice.
On August 11, 2026, the U.S. Department of Justice announced that Continental Aerospace Technologies Inc. will pay $11,772,680.14 to settle claims that it violated the False Claims Act by submitting false information to secure a PPP loan intended for small businesses affected by the COVID-19 pandemic.
“PPP loans were intended to help small businesses in the United States,” said Brett A. Shumate, Assistant Attorney General of the Justice Department’s Civil Division. “The Department remains committed to pursuing those who violated the requirements of this taxpayer-funded program.”
Brad Schimel, First Assistant U.S. Attorney for the Eastern District of Wisconsin, added, “Continental, as part of a large Chinese-owned corporation, allegedly provided false information to the Small Business Administration (SBA) to obtain taxpayer funds to which it was not entitled.”
According to the Justice Department, Continental was part of a multinational corporation affiliated with the Aviation Industry Corporation of China (AVIC) at the time of its loan application. The company exceeded the SBA’s employment size standards and was ultimately owned by a government entity, making it ineligible for the PPP loan.
The settlement resolves claims brought under the qui tam provisions of the False Claims Act, allowing private individuals to file lawsuits on behalf of the government and receive a portion of any recovered funds. GNGH2 Inc., which filed a lawsuit in the Eastern District of Wisconsin, is set to receive $1,765,902.02 as part of the settlement.
Wendell Davis, SBA General Counsel, emphasized the agency’s commitment to combating PPP fraud, stating, “The SBA is committed to rooting out every dollar of PPP fraud. We will aggressively pursue bad actors to hold them accountable and recover improperly obtained pandemic relief funds.”
The PPP was established by Congress in March 2020 to provide emergency financial assistance to Americans impacted by the pandemic. Eligible businesses could receive forgivable loans guaranteed by the SBA, provided they certified their eligibility and the accuracy of their information.
This case highlights the collaborative efforts of the Justice Department’s Civil Division, the U.S. Attorney’s Offices for the Eastern District of Wisconsin and Southern District of Alabama, and the SBA’s legal counsel in addressing fraudulent claims. While the settlement resolves the allegations, it does not determine liability, and the Justice Department remains committed to pursuing fraud cases to protect taxpayer interests.
