According to the Office of the Federal Prosecutor in Washington, D.C., the iconic bookstore Strand in New York City has agreed to pay nearly $1.5 million as part of a civil settlement to resolve an issue regarding its receipt of a government loan during the COVID-19 pandemic; since the store is owned by the wife of Democratic Senator Ron Wyden from Oregon, such a loan was not supposed to be approved in the first place.
The office of U.S. Attorney Jeanine Pirro stated on Tuesday that Strand applied for a loan of $932,350 in February 2021, with the funds coming from the Paycheck Protection Program ( Paycheck Protection Program , PPP ) managed by the Small Business Administration.
The office stated that the shop owner, Nancy Bass Wyden, claimed in the loan application: 'The spouse of a member of Congress does not directly or indirectly hold controlling interests in the applicant.'
The prosecution stated: 'Ms. Wyden's testimony is knowingly and substantially false, and Strand is not entitled to the second round of loan she received.'
The prosecution stated that Strand will pay $1,482,560 to settle this case. The office indicated that the bookstore was not found to be responsible.
Strand stated in the declaration that there was an 'unintentional' error during the loan application process, and claimed that at the time, they were not aware that such funds were prohibited from being disbursed to companies owned by spouses of members of Congress.
The husband of Bass Wyden has served in the Senate for over 30 years and is a staunch critic of President Donald Trump; Trump appointed Pirro as the Chief Prosecutor of Washington, D.C.
Bass Wyden is the granddaughter of Strand, the founder Ben Bass. The flagship store of Strand is located in Greenwich Village.
When Congress passed the Coronavirus Aid, Relief, and Economic Security Act in March 2020, it authorized the issuance of PPP loans that were exempt from certain requirements.
In December 2020, the prosecution stated that Congress passed a separate law to provide additional funding for the PPP loan program, which stipulated that if a member of Congress or their spouse directly or indirectly held controlling interests in the applicant for a PPP loan, then such enterprise would not be eligible to receive a second round of PPP funding.
On Tuesday, Pirro stated in a statement: 'The establishment of the salary protection plan is aimed at saving American jobs, not to benefit those who are not eligible for taxpayer-funded relief, especially the wives of U.S. senators.'
Her office pointed out that the False Claims Act ( False Claims Act ) which Strand is alleged to have violated "allows the government to establish liability based on reckless disregard, and permits the government to recover amounts exceeding the actual losses," and that is precisely what occurred in this case.
This civil settlement resolved claims arising from the so-called qui tam lawsuits; such lawsuits allow private whistleblowers to file lawsuits on behalf of the U.S. government and to receive a portion of any recovered funds.
The qui tam litigation in this case was filed by a company entity named Blockquote Inc in the Federal District Court of Washington, D.C. The Pirro office has not disclosed the owner of this company, and Blockquote will receive a total of approximately $148,256 in compensation as part of this settlement.
The litigation files related to Blockquote are currently under seal, and the public is not allowed to access them.
After CNBC requested reviews from bookstores and Bass Wyden, Strand stated in its declaration that the restrictions it violated were passed by Congress between the first and second rounds of PPP.
Strand said, "Unfortunately, neither the accountant at the bookstore nor the bank that handled the loan realized this change when processing the second round of applications."
"We insist on these facts: the incident occurred during an unprecedented and rapidly changing public health emergency, and this mistake was not intentional," the bookstore stated. "We hope that this matter can be viewed in an objective and appropriate context, and that the application of justice should always be fair and impartial, free from political influence."
The senator's office did not immediately respond to a request for comment.
