ECNETNews reports that a California law firm has agreed to pay $274,000 to resolve allegations of violating the False Claims Act in relation to a Paycheck Protection Program (PPP) loan forgiveness application. The settlement involves The Bloom Firm and its senior managers, who purportedly provided inaccurate information regarding the use of PPP funds.
The PPP was initiated in March 2020 under the CARES Act to help small businesses facing financial hardship due to the COVID-19 pandemic. These loans were intended for payroll and operational expenses, offering forgiveness when utilized correctly. Borrowers were mandated to certify the accuracy of the information submitted and the proper allocation of funds.
The U.S. Department of Justice accused The Bloom Firm of falsely certifying the use of its PPP loan for eligible payroll costs, stating that some employees paid with these funds were ineligible for assistance or did not work during the loan period. In the settlement agreement, The Bloom Firm will pay $204,200.34, while the firm’s senior managers will each contribute $35,384.49.
“PPP loans were designed to deliver essential support to small businesses,” stated a representative from the Justice Department’s Civil Division. “The department remains dedicated to holding accountable those who exploit this taxpayer-funded initiative.”
Additionally, a U.S. Attorney emphasized the critical responsibility of attorneys to adhere strictly to legal standards, particularly concerning government programs aimed at assisting businesses and individuals affected by the pandemic.
The settlement also addressed claims under the qui tam provisions of the False Claims Act, permitting private individuals to file lawsuits on behalf of the government for fraudulent claims. This resulted in a whistleblower receiving approximately $44,000 from the settlement.
This resolution was facilitated through collaborative efforts 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.
