The Bloom Firm, a law firm based in California, along with senior managers Lisa Bloom and Braden Pollock, have agreed to pay a total of $274,000 to settle allegations that they violated the False Claims Act by providing false information in support of a Paycheck Protection Program (PPP) loan forgiveness application.
The PPP was established in March 2020 under the Coronavirus Aid, Relief, and Economic Security (CARES) Act to provide financial relief to small businesses struggling due to the COVID-19 pandemic. These loans, intended to cover payroll and other business expenses, were forgivable if the funds were used correctly. When applying for forgiveness, borrowers were required to certify that the information they provided was truthful and that the funds were used for eligible expenses.
According to the U.S. Department of Justice, The Bloom Firm, under the direction of Bloom and Pollock, falsely certified that it used its first draw PPP loan funds for eligible payroll expenses. The government alleged that the firm used part of the PPP loan to pay employees who were either ineligible to receive PPP funds or who did not work for the firm during the covered loan period. As part of the settlement, The Bloom Firm will pay $204,200.34, while Bloom and Pollock will each pay $35,384.49.
“PPP loans were intended to provide critical relief to small businesses,” said Principal Deputy Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division. “The department is committed to pursuing those who misused this taxpayer-funded program.”
U.S. Attorney Martin Estrada for the Central District of California added, “Attorneys have a duty to follow the law to the letter – especially when it comes to government programs aiding individuals and businesses impacted by COVID-19.”
The settlement also resolved claims brought under the qui tam, or whistleblower, provisions of the False Claims Act. This provision allows private parties to file suit on behalf of the United States for false claims and to share in a portion of the government’s recovery. Liberty Law Office Inc., which filed the lawsuit, will receive approximately $44,000 from the settlement.
The resolution was achieved through a coordinated effort between the Civil Division’s Commercial Litigation Branch, Fraud Section, the U.S. Attorney’s Office for the Central District of California, and the Small Business Administration (SBA)’s Office of General Counsel and Office of the Inspector General.
This article, “California Law Firm and Senior Managers Settle False Claims Act Allegations Over Misuse of PPP Loan Funds” was first published on Small Business Trends