Strand Bookstore Settles Covid Loan Claim for $1.48 Million
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A well-known New York bookstore has agreed to pay a civil settlement of nearly $1.5 million. The Strand will pay $1,482,560 to settle claims over a pandemic relief loan it was not allowed to take, federal prosecutors in Washington, D.C. said on Tuesday.
The loan and the rule at issue
The Strand applied in February 2021 for a $932,350 loan from the Paycheck Protection Program, a forgivable-loan scheme run by the Small Business Administration. It was a second-draw loan.
Between the two rounds, Congress changed the terms. Legislation passed in December 2020 barred second-draw funds for any applicant in which a member of Congress or a spouse held a controlling interest. The store is owned by Nancy Bass Wyden, wife of Oregon Democratic Sen. Ron Wyden.
Bass Wyden is the granddaughter of Ben Bass, who founded the Strand. Its flagship store is in Greenwich Village.
On the application, Bass Wyden certified that no congressional spouse held a controlling interest in the business. The U.S. Attorney's Office said that statement was "knowingly and materially false."
Why the payment is larger than the loan
The office relied on the False Claims Act. It said the law lets the government establish liability on the basis of reckless disregard and recover more than its actual losses. In its view, that is what happened here.
The settlement carries no determination of liability by the store, the office said.
The store's account
The Strand called the mistake "unintentional." It said the accountant and the lender missed the congressional-spouse ban when the second-draw application went through. The store also said the situation arose during a fast-moving public health emergency.
It added a hope that the matter would be viewed objectively, with justice applied fairly and free of political considerations.
The senator, in the Senate for over three decades, is a staunch critic of President Donald Trump, and Trump chose the prosecutor now handling the case, Jeanine Pirro. A spokesman for Wyden said the couple do not discuss her business and that the senator had no part in the loan or the settlement.
The whistleblower behind the case
The settlement closes a qui tam lawsuit, a type of case in which a private party sues on behalf of the government and can receive a share of any recovery. A corporate entity, Blockquote Inc., filed it in federal court in Washington.
Blockquote will receive about $148,256. Prosecutors did not disclose who owns it, and the court docket is sealed.
Source: CNBC