An Ohio auto parts manufacturer has agreed to pay more than $3 million in fines and restitution after admitting it lied to receive loans and loan forgiveness under the federal government’s COVD-19-era Paycheck Protection Program.

The company, Murotech Ohio Corp., makes auto parts primarily in St. Marys. It is a subsidiary of a Japanese company, Muro Corp., prosecutors said.

Under the settlement, the company has admitted that it “knowingly provided false information to obtain Paycheck Protection Program loans and loan forgiveness,” prosecutors said.

Murotech agreed to pay more than $1 million in restitution.

“Murotech Ohio’s first application submitted in May 2020 certified that the company had fewer than 500 employees, but in fact, it exceeded that amount when counting affiliates,” prosecutors said. 

“A second application submitted in January of 2021 certified that it employed fewer than 300 employees, but in truth, the company employed far more when including affiliates," they said. "Murotech Ohio then applied to have both federal loans forgiven and certified on its submitted applications that the number of employees was below program limit requirements. “

Authorities learned about the scheme from whistleblowers, according to a news release.

The whistleblowers will each receive $151,980.75 under the terms of the settlement.

The Paycheck Protection Program was riddled with fraud, in part because of too little government oversight, the Cato Institute wrote.

“There was a clear failure of federal oversight for the PPP during the pandemic and an evaluation of the issues has been long overdue," the Institute said in 2023.

The U.S. Small Business Administration backed 100% of the loans.

The loans were awarded to "nonexistent businesses, celebrities, large publicly traded companies, and individuals looking to purchase sports cars,” Cato said. “While cases of fraud should indeed be condemned, those cases should not be used to divert attention from the fact that Congress and the SBA deliberately removed controls and safeguards to rush the $800 billion program out the door.”

Murchtech did not immediately respond to The Center Square's request for comment.