Milford-Based Company Pays Over $2 Million To Resolve Loan Allegations, Federal Prosecutors Say

MILFORD, CT — The parent company of Planet Fitness will pay the government over $2 million to resolve accusations that it used and was reimbursed for a Paycheck Protection Program loan it wasn't eligible for, according to a statement from federal prosecutors.

IGNITE Fitness Holdings, a Milford-based company, has 130 Planet Fitness locations across the U.S. and Canada.

The Paycheck Protection Program was created by the federal government in March 2020. The act was intended to support small businesses struggling to pay employees and other expenses during the COVID-19 pandemic. When applying for these loans, borrowers were required to certify that they were eligible for the requested loans and that the information they provided was true and accurate.

One of the requirements of a second round of forgivable loans under the program was the company could have no more than 300 employees, with certain limited exceptions.

In February 2021, IGNITE applied for a loan for $2 million, certifying that it was eligible for a “per-location” exception to the employee-count size standard. However, this exception did not apply to the fitness center operator, prosecutors said.

After receiving the loan, the company sought and received forgiveness of the total loan amount of $2,007,726, including $2 million in principal and $7,726 in interest, according to prosecutors.

The government alleged that IGNITE was not eligible for the PPP loan it received and had forgiven because it had more than 300 employees and no exception to the employee-count size standard applied to the company.

The company agreed to pay the full $2,007,726 to resolve the dispute.