On August 15, 2024, the United States Attorney’s Office for the Central District of California announced that a Calabasas-based law firm, The Bloom Firm, and two members of the firm’s senior management, had agreed to pay $274,000 to settle allegations that they violated the False Claims Act (FCA) by knowingly providing false information in support of a Paycheck Protection Program (PPP) loan forgiveness application submitted by the firm.
According to the DOJ’s press release, the law firm, at the direction of two members of management, including the firm’s founding partner, sought and obtained forgiveness of the firm’s PPP loan by falsely certifying that the firm used the PPP loan funds for eligible payroll expenses. The DOJ contended that the firm used a portion of its PPP loan to pay for several ineligible employees, some of whom did not work for the firm during the covered period of the loan.
In announcing the settlement, Martin Estrada, the United States Attorney for the Central District of California, stated: “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,” said U.S. Attorney Martin Estrada for the Central District of California. “This settlement reaffirms my office’s commitment to affirm and uphold the integrity of pandemic-assistance programs.”
The settlement was the result of a qui tam whistleblower lawsuit and the whistleblower appears to be another law firm.
The False Claims Act is a powerful tool, imposing treble damages and massive per-claim penalties. In order to incentivize potential whistleblowers–known as “Relators”–the FCA provides that a Relator is entitled to between 15% and 30% of the eventual recovery.
If you need assistance in connection with a False Claims Act matter, please contact us today.