Iconic NYC landmark Strand Bookstore to pay $1.5M for taking off-limits COVID loan

The Strand Bookstore – the iconic NYC landmark that’s been in business for almost a century – has agreed to pay nearly $1.5 million for accepting a COVID-era loan that was off-limits since the store’s owner is married to a US senator, the Department of Justice said Tuesday. 

In February 2021, Strand applied for a $932,350 loan from the Paycheck Protection Program, which required an assurance that a spouse of a member of Congress did not hold a controlling interest in the business, according to the US attorney’s office in Washington, DC.

But Nancy Bass Wyden – granddaughter of Ben Bass, who founded the flagship Greenwich Village location in 1927 when he was 25 – has been married to Sen. Ron Wyden for over 20 years, meaning the application was “knowingly and materially false,” the attorney’s office said. 

The Democratic senator from Oregon – an outspoken critic of President Trump, who nominated former Fox News host Jeanine Pirro as the top prosecutor in DC – has held his seat for 30 years. 

“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 US senator,” Pirro said in a statement. 

The settlement does not include any determination of liability, according to Pirro’s office.

Congress passed the CARES Act in March 2020, which allowed small businesses and nonprofits to apply for PPP loans – meant to help them keep employees on payroll and stay afloat while many stores were forced to close their doors.

In December 2020, Congress approved additional PPP funding and allowed eligible businesses to apply for a “second draw” of loans with the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act.

But the new Economic Aid Act blocked businesses from applying for a second loan if a member of Congress or their spouse held a controlling interest in the loan applicant, a new restriction in the program. 

In a statement to The Post, Nancy Bass Wyden said the company regrets what it described as an oversight and recognizes the importance of complying with the law, but argued that the application was a simple mistake resulting from rapidly-changing regulations during the pandemic.

“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.

“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.”

In October 2020, the Strand pleaded with supporters to buy books at their stores, purchase gift cards and spread the word online, saying their business model during the pandemic was “unsustainable” and that revenue had plummeted 70%.

The settlement resolves an investigation by Assistant US Attorney Sean Tepe with support from the Small Business Administration resulting from whistleblower claims. 

Pirro’s office said it was the second recovery on behalf of the US since she announced the creation of the Fraud and Asset Recovery Division in September. The Post has asked the attorney’s office what the first case was.

The DOJ also launched the National Fraud Enforcement Division in April.