Latest news with #Chambers-owned
Axios
10-04-2025
- Business
- Axios
Herb Chambers dealerships to pay $11.8M in PPP fraud case
Car dealership chain owner Herb Chambers has agreed to pay $11.8 million to settle federal allegations that his companies fraudulently obtained pandemic-era government loans. State of play: Federal prosecutors allege eight Chambers-owned companies requested Paycheck Protection Program loans after a decision by the Small Business Administration limited a single corporate group to $20 million. A bank initially canceled Chambers' unfunded loan applications because of the cap, but the companies reapplied with a different bank that funded the loans. The other side: Herb Chambers Companies CEO Nicolas Gennetti said the loan program violation stemmed from "conflicting professional advice" and "vague and unclear language" in the loan requirements.
Boston Globe
09-04-2025
- Business
- Boston Globe
Auto dealer Herb Chambers agrees to pay $11.8 million to settle federal COVID-19 fraud allegations
'Today's settlement resolves allegations that Herb Chambers and his companies tried to game the system that was set up to keep struggling businesses afloat,' Jodi Cohen, the FBI's special agent in charge of the Boston division, said in the statement. 'When fraudulent applications wrongly drain a program set up to offset economic upheaval, it's a blow to the folks who truly need help.' A copy of the 16-page settlement agreement shows that Chambers signed it Monday. Advertisement 'There was mass confusion at the time with the guidelines,' said George Regan, a spokesperson for Chambers. 'We went to multiple people and we got multiple conflicting answers and that's why we are where we are today.' Nicolas Gennetti, CEO of The Herb Chambers Companies, echoed the same in an emailed statement. 'This settlement is the result of conflicting professional advice regarding vague and unclear language in the PPP loan eligibility requirements, which did not contain definitions of key terms when they issued and came out at a time when the SBA repeatedly revised the governing rules,' Gennetti's statement said. Advertisement 'Once the issue had been identified, Mr. Chambers directed that management work cooperatively and diligently with federal authorities to rectify and to resolve the situation,' the statement said. 'The settlement acknowledges this cooperation. All PPP loan proceeds were used for proper purposes, and there is no allegation otherwise.' According to prosecutors, 29 of Chambers's companies applied for the loans in April 2020. Ten days later, and before eight of the 29 companies had received their loans, new rules were established, setting a $20 million cap on the loans, if the businesses were part of a single corporate group. Because of the cap, a bank canceled the unpaid loans to the eight companies. Four months later, the eight companies owned by Chambers reapplied for the loans through a different bank and were approved and given the money. 'The United States contends that the SBA's [new rules] applied to the companies Mr. Chambers owned,' Foley's statement said. 'The United States further contends that eight companies owned by Mr. Chambers were not eligible for the PPP loans because the SBA had already funded over $20 million to other Chambers-owned businesses.' Chambers and his companies cooperated with the investigation, according to Foley's statement. 'The Paycheck Protection Program was created to provide a financial lifeline to small businesses struggling to stay afloat during the unprecedented COVID crisis — not to serve as a funding mechanism for companies that sought to evade program limits,' Foley said in her statement. In February, Chambers announced that he had reached Advertisement The $1.34 billion deal, for 52 franchises across 33 dealerships, is expected to close this summer. Tonya Alanez can be reached at
