Sarasota tourism firm to pay nearly $2.3M in civil COVID relief case

A travel and tourism company in Sarasota has agreed to pay more than $2.28 million to settle a civil lawsuit over allegations it improperly received forgiveness of a loan under the Paycheck Protection Program during the pandemic, federal officials say.

Miles Partnership was not eligible for PPP funds due to its work with foreign tourism boards, according to a complaint filed by a New Jersey whistleblower.

In March 2020, Congress created the PPP, which was administered by the U.S. Small Business Administration, to provide emergency loans to small businesses suffering economic hardship due to the pandemic. The PPP was part of the Coronavirus Aid, Relief and Economic Security Act, which also authorized businesses to seek loan forgiveness for spending funds on eligible expenses. Businesses required to file a registration statement under the Foreign Agents Registration Act, meaning the entity works on behalf of foreign entities, were not eligible for PPP loans.

Miles Partnership applied for a second-draw PPP loan for $2 million on Jan. 23, 2021, according to court documents, which say the loan was forgiven Oct. 21, 2021.

In March 2023, GNGH2 Inc., a New Jersey-based entity, filed a complaint alleging that due to its work with foreign tourism boards, the Sarasota company had to file a registration statement under FARA and so was not eligible for PPP funds. The travel company “served as a publicity agent and public relations counsel for various foreign tourism boards, including the Bermuda Tourism Authority,” the complaint says.

GNGH2 sought a $6 million judgment against the travel company for making false statements in saying in its PPP paperwork that it did not need to file a registration statement under FARA, court documents show.

To resolve the allegations, Miles Partnership agreed to a civil settlement of $2,281,950, while GNGH2 will receive $207,450 as a share in the recovery, prosecutors say in a Sept. 17 statement. 

Miles Partnership President & CEO David Burgess addressed the settlement in a statement to the Business Observer. “As part of our robust governance policies, we consulted technical experts and legal counsel to determine eligibility and application requirements to help navigate complex PPP rules and regulations," Burgess says. "As soon as we learned that FARA was an applicable requirement, we took the necessary steps and are pleased to come to a mutual agreement without liability.”

In the statement, Theresa Meers, the U.S. Small Business Administration's general counsel, calls the outcome a "favorable settlement" that was the "product of enhanced efforts by federal agencies such as the Small Business Administration working with the U.S. Attorney’s Office, other federal law enforcement agencies, as well as private individuals who uncover borrower misconduct to recover the lending program’s damages as well as penalties.”

The United States Attorney’s Office is committed to investigating and holding responsible those applicants who improperly obtained loans under the PPP program,” U.S. Attorney Roger B. Handberg for the Middle District of Florida adds in the statement.