An iconic New York City bookstore owned by a Democratic senator’s wife has agreed to pay nearly $1.5 million to settle allegations that it improperly received a COVID-era loan it was barred from obtaining under federal law.
The Strand will pay $1,482,560 to resolve allegations that it violated the False Claims Act by applying for and receiving a $932,350 second-draw Paycheck Protection Program (PPP) loan in 2021, the Department of Justice (DOJ) announced Tuesday.
At the time, Nancy Bass Wyden, the wife of Democratic Oregon Sen. Ron Wyden, was the controlling owner of the Manhattan bookstore.
Federal law barred businesses from receiving second-draw PPP loans if a member of Congress or their spouse “directly or indirectly held a controlling interest in the PPP loan applicant,” according to the DOJ.
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The Strand applied for the $932,350 loan in February 2021. As part of the application, Nancy Bass Wyden certified that the spouse of a member of Congress did not directly or indirectly hold a controlling interest in the business, federal prosecutors said.
The DOJ alleged that certification was “knowingly and materially false” because Wyden was The Strand’s controlling owner, making the bookstore ineligible for the loan.
“The Paycheck Protection Program was created to save American jobs, not to enrich those who aren’t eligible for taxpayer-funded relief, especially the wife of a U.S. Senator,” said Jeanine Pirro, the U.S. Attorney for the District of Columbia.
“Strand Book Store, owned by Nancy Bass Wyden, wife of U.S. Senator Ron Wyden, received $932,350 in second draw PPP funds despite a federal law barring businesses controlled by a member of Congress or their spouse from receiving those loans.”
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Pirro added, “Our Fraud and Asset Recovery Division will expose this abuse, pursue those who exploit taxpayer dollars, and hold them accountable. No one gets a pass when it comes to defrauding the American taxpayer.”
In a statement to FOX Business, Nancy Bass Wyden said the violation was an “unintentional” mistake that occurred as pandemic-era relief rules were rapidly changing.
“During the COVID-19 pandemic, laws, regulations and eligibility requirements governing government relief programs were changing rapidly. The restriction at issue was enacted between the first and second rounds of the PPP program, and unfortunately, the bookstore’s accountant and the bank administering the loan were not aware of this change when the second-draw application was processed,” she said.
Nancy Bass Wyden said the funds were returned once the issue was discovered and expressed regret over the oversight.
“We stand by the facts: the circumstances arose during an unprecedented and rapidly changing public health emergency, the mistake was unintentional, and the funds were returned as soon as the issue came to our attention,” she added. “We regret the oversight and recognize the importance of complying with all applicable laws and regulations. We hope this matter will be viewed objectively and in its proper context, with the understanding that the application of justice should always be fair, impartial, and free from political considerations.”
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The PPP was created under the Coronavirus Aid, Relief, and Economic Security (CARES) Act in 2020 to provide forgivable loans to eligible small businesses and nonprofits to retain workers and cover certain expenses during the COVID-19 pandemic.
Congress later authorized a second round of PPP loans but prohibited businesses controlled by members of Congress or their spouses from receiving the funds.
The Strand has been a fixture of New York City’s literary scene for almost a century.
Ben Bass founded the bookstore in 1927 on Fourth Avenue. His son, Fred Bass, later moved the store to its current location at Broadway and 12th Street in 1957.
Nancy Bass Wyden, Fred’s daughter, joined the family business full time at age 25 and now runs the store. The Strand says it carries more than 2.5 million used, new and rare books.
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FOX Business reached out to Ron Wyden’s office for comment.
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