Strand settles PPP loan lawsuit involving Sen. Ron Wyden’s wife

The Strand, the iconic New York City bookstore, has agreed to pay nearly $1.5 million in a civil settlement after accepting a coronavirus government loan that was off-limits because the store is owned by the wife of Oregon Democratic Sen. Ron Wyden, according to the federal prosecutor’s office in Washington, D.C.

Strand applied for a $932,350 loan from the Paycheck Protection Program administered by the Small Business Administration in February 2021, U.S. Attorney Jeanine Pirro’s office said Tuesday.

Pirro’s office said the owner, Nancy Bass Wyden, certified in her loan application that “the congressman’s spouse does not have direct or indirect control of the applicant.”

“Mr. Wyden’s certification was intentionally and materially false, and Mr. Strand was not eligible for a second loan,” the firm said.

The Strand will pay $1,482,560 in settlement. Pirro’s office said the store had not admitted liability.

Strand said in a statement that the store made an “unintentional” mistake when applying for the loan and said it did not know at the time that it was prohibited from funding businesses owned by spouses of legislators.

Bass Wyden’s husband, who served in the U.S. Senate for more than 30 years, has been harshly critical of President Donald Trump, who appointed Pirro to the top District of Columbia prosecutor’s post.

Bass Wyden is the granddaughter of Ben Bass, founder of Strand, whose flagship store is in Greenwich Village.

Congress authorized forgivable PPP loans when it passed the Coronavirus Aid, Relief, and Economic Security Act in March 2020.

In December 2020, Congress provided additional funding to the PPP loan program in separate legislation, which included a “prohibition on a business from obtaining a second round of PPP funding if a member of Congress or his or her spouse directly or indirectly holds a controlling interest in the PPP loan applicant,” Pirro’s office said.

“The Paycheck Protection Program was created to protect American jobs, not to enrich those who don’t qualify for taxpayer relief, especially the wives of U.S. senators,” Pirro said in a statement Tuesday.

His office said the False Claims Act that Strand allegedly violated “establishes liability based on reckless disregard and allows the government to compensate for more than its actual losses,” which is what happened in this case.

The civil settlement resolves claims brought under the so-called Quitam action, which allows private whistleblowers to sue on behalf of the U.S. government and receive a portion of compensation.

The lawsuit in this case was filed in U.S. District Court in Washington by Blockquote Inc., a corporation. Blockquote, whose owners are not disclosed by Mr. Pirro’s office, will receive a total of approximately $148,256 in stock in connection with the settlement.

Blockquote’s lawsuit documents have been sealed from public view.

The Strand said in a statement after CNBC reached out to the store and Bass Wyden for comment that the restrictions the store violated were passed by Congress between the first and second rounds of the PPP.

“Unfortunately, the bookstore’s accountant and the bank managing the loan were unaware of this change at the time the secondary draw application was processed,” Strand said.

“We stand by the facts. This situation occurred during an unprecedented and rapidly evolving public health emergency, and the error was unintentional,” the store said in a statement. “We hope that this issue will be viewed objectively and in the proper context, with the understanding that the application of justice should always be fair, impartial and free from political considerations,” the store said.

Senator Wyden’s office did not respond to a request for comment.