Sterling Heights business pays $1.4 million to settle Paycheck Protection Program violation claim
The case against Slifco Electric LLC of Sterling Heights was detailed in a press release issued Tuesday by acting U.S. Attorney Julie A. Beck from the Eastern District of Michigan.
Congress created the PPP program in March 2020 to provide emergency assistance to businesses that faced financial challenges at the outbreak of the COVID-19 pandemic. Eligible businesses could apply for loans guaranteed by the Small Business Administration, and additional requirements applied to those seeking to have the loans forgiven at a later date.
The agreement settles allegations that Slifco violated the False Claims Act by falsely certifying that it was eligible for full loan forgiveness through the program. The United States had alleged that Slifco Electric failed to disclose that Slifco Electric paid $730,031 in capital distributions to its owner, John P. Slifco, for his personal expenses. That information would have been required as part of the application.
"When businesses and individuals obtained COVID-19 relief funds that they didn't deserve, taxpayers were cheated," Beck said in her press release. "This office is committed to addressing fraud perpetrated against government programs, and we will continue to hold accountable those who violate the law."
"The favorable settlement in this case is the product of enhanced efforts by federal agencies such as the Small Business Administration working with the U.S. Attorney's Office, SBA's Office of Inspector General and other Federal law enforcement agencies, as well as private individuals who uncover fraudulent conduct to recover the product of this fraud as well as penalties," SBA General Counsel Wendell Davis said in his statement.
The matter was handled by Assistant U.S. Attorney Anthony Gentner from the United States Attorney's Office for the Eastern District of Michigan, with assistance from the SBA's Office of General Counsel.
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Every state has these programs, especially for first-time buyers. Learn more: Your guide to 3-percent-down mortgages 4. You're trying to finance an out-of-favor property Not all homes are created equal, as far as lenders are concerned. The traditional, detached, single-family residence still rules, and you may run into trouble financing an alternative. Condos are one example. In response to the June 2021 collapse of an oceanfront tower near Miami, Fannie and Freddie rolled out new rules covering condo loans. The giant mortgage market-makers have decided not to finance some buildings that have low reserves, need repairs or are facing lawsuits. Critics say the stricter reviews are causing condo sales to fall apart, even in buildings with no structural issues. Manufactured homes can also be challenging to finance. And if appraisers or inspectors find a structural flaw or other issue with the home itself — no matter what type of structure it is — that can slow the approval, or even kill it. 5. Your home appraisal comes in low Before a lender finances your home purchase, it wants to ensure that the property is worth what you're planning to pay for it. That's why lenders typically require an appraisal during the underwriting process. If that appraiser determines that the property is worth less than the mortgage you've applied for, you have what's called an appraisal gap. A lender won't agree to lend you more than it believes a home is worth. If you can identify errors in the appraisal, you may be able to get it redone — but if there's still a gap, and you still want the property, you'll need to make up the difference in cash. 6. Something recently changed in your financial life The lending process prizes financial stability and predictability. Unfortunately, a recent job change or period of unemployment can throw a wrench in your approval. A short employment history or interruption in earnings sends warning signals to the software, too. Unusual activity in your bank account can be another issue. Large, unusual deposits might indicate you borrowed money for your down payment — which you may need to repay along with your mortgage. If you got money from relatives to help you buy a house, make sure to submit a gift letter as part of your application. 7. You don't meet the loan program's requirements Different types of loans come with different specifications. If you want an FHA loan, for example, your home price can't exceed the loan limit applicable to your location. In 2025, that's $524,225 in most areas. The house also needs to pass a special type of appraisal that reviews the property's condition. Similarly, loans backed by the VA and the USDA have their own unique requirements. On top of all of this, lenders generally have their own proprietary guidelines. Failing to meet any of them can lead to your mortgage application being denied. 8. You're missing information on your application Make sure to fill out the mortgage application in its entirety. If it's incomplete — or if there are errors, such as a missing digit — the underwriting software might discard your application, resulting in an automated rejection. How to get a mortgage after your application is denied Take heart: If you are denied a mortgage, there are workarounds to many of these issues. Generally speaking, government-backed loans — such as FHA or VA loans — have more flexible requirements and are a good fit for borrowers with lower credit scores or little cash for down payments. If you have a unique income situation, such as owning a business with unsteady cash flow, you might apply for a non-QM loan. These come with more flexible credit criteria and income requirements than conventional loans. Manual underwriting The vast majority of conforming loans — those eligible to be bought by Fannie and Freddie — are decided via automatic underwriting, but some loans are still reviewed by a human. Lenders often do manual underwriting when an application would likely be denied through an automated system, or if the borrower has some unusual circumstances but is otherwise qualified. Certain types of mortgages, like jumbo loans and non-QM loans, are more likely to be manually underwritten. But you can request it for any mortgage if you believe your particular situation will not be fully understood by the software. Be prepared to supply additional paperwork — financial statements reaching farther back, for example — and for a longer process. Bear in mind that, even with a manual underwriter, your loan still has to conform to specific requirements. FAQ How long do underwriters take to approve a mortgage? It depends on the lender, the tools they use and how quickly you provided the required information. On average, it takes about 42 days to close a new-purchase mortgage, according to ICE Mortgage Technology, How worried should I be about underwriting? Not very. Take steps before you approach lenders — like paying down other debts and improving your credit score — and you should feel confident when applying. If you're still nervous, you can explore prequalification before you seek preapproval. This is a less stringent process that can give you an idea of where you stand. What are some things I should not do during underwriting? To avoid having your mortgage application declined, do two things. First, don't make any financial changes. Keep paying your bills on time and don't open any new loans or lines of credit. Second, stay responsive. The lender might ask for additional information. If you don't provide it in a timely manner, it can lead to denial. 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