New England auto mogul Herb Chambers has agreed to pay roughly $11.8 million to resolve federal allegations that several of his companies falsely certified eligibility for pandemic-era emergency financial assistance.

The settlement agreement reached with the feds also includes Herb Cambers Companies and James Duchesneau, one of the companies’ officers.

CEO Nicolas Gennetti attributed the settlement to “conflicting professional advice regarding vague and unclear language” in the Paycheck Protection Program’s “loan eligibility requirements.”

Gennetti pointed out that Herb Chambers Companies cooperated with federal investigators once the eligibility issue was identified.

The Small Business Administration’s Interim Final Rule, published in late April 2020, established that businesses part of a single corporate group could not receive more than $20 million in PPP loans.

The feds argued the rule had applied to Chambers’ companies and that eight of his businesses didn’t qualify for eligibility because the SBA had already funded over $20 million to others in the auto giant.

A bank initially canceled loans that the eight companies applied for due to the $20 million cap. But a second bank provided the PPP financial assistance to the businesses when they reapplied several months later, according to Massachusetts U.S. Attorney Leah Foley.

In a statement after the feds signed the settlement agreement on Wednesday, Gennetti said the PPP loan eligibility requirements “did not contain definitions of key terms when they were issued and came out at a time when the SBA repeatedly revised the governing rules.”

“Once the issue had been identified, Mr. Chambers directed that management work cooperatively and diligently with federal authorities to rectify and to resolve the situation,” Gennetti said. “The settlement acknowledges this cooperation. All PPP loan proceeds were used for proper purposes, and there is no allegation otherwise.”

Foley’s office stated that the settlement specifically “resolves False Claims Act allegations that the companies falsely certified to the United States Small Business Administration their eligibility for Paycheck Protection Program loans.”

The PPP arose from the federal Coronavirus Aid, Relief, and Economic Security Act that Congress enacted at the onset of the COVID-19 pandemic, in late March 2020. The legislation “authorized forgivable loans to small businesses for job retention and certain approved expenses.”

“The Paycheck Protection Program was created to provide a financial lifeline to small businesses struggling to stay afloat during the unprecedented COVID crisis – not to serve as a funding mechanism for companies that sought to evade program limits,” Foley said in a statement. “Today’s resolution demonstrates our office’s unwavering commitment to protecting taxpayer-funded relief programs and holding accountable those who misuse them.”

A release from Foley’s office highlighted that Chambers and his companies cooperated with the investigation. Boston FBI Special Agent in Charge Jodi Cohen accused the giant of trying to “game the system that was set up to keep struggling businesses afloat.”

“When fraudulent applications wrongly drain a program set up to offset economic upheaval, it’s a blow to the folks who truly need help,” Cohen said in a statement.

Earlier this year, publicly traded Asbury Automotive Group acquired Herb Chambers Companies in a $1.34 billion blockbuster deal, which is expected to close in the second quarter of 2025.

Chambers, a Dorchester native and major Boston-area philanthropist, is expected to stay on after the merger in the post of Special Advisor to Asbury, while retaining ownership of Mercedes-Benz of Boston in Somerville.

The deal for Herb Chambers Companies, the 14th largest private dealer by revenue in the U.S., includes 33 dealerships, 52 franchises, and three collision centers across the region.

“As I look back on the last 40 years in business, I do so with immense pride, and as I look forward, I will do so with great satisfaction knowing what we built together will be in trusted hands,” Chambers said in a release announcing the sale in February.

Last December, Chambers donated $100 million to Massachusetts General Hospital for a new tower to focus on cancer care at the Boston hospital complex.

Chambers said at the time that the gift was part of his ongoing effort to give back to the city, noting he wanted it to “shine as a beacon of hope for everyone touched by this awful disease.”