The Bloom Firm, a California law firm, and its senior managers Lisa Bloom and Braden Pollock have agreed to pay $274,000 to settle allegations of violating the False Claims Act. The allegations involve providing false information in support of a Paycheck Protection Program (PPP) loan forgiveness application.
The PPP was created in March 2020 under the Coronavirus Aid, Relief, and Economic Security (CARES) Act to support small businesses facing economic hardship due to the COVID-19 pandemic. The CARES Act authorized forgivable loans for payroll and other business expenses. In December 2020, Congress approved funding for a second round of PPP loans starting January 2021. Borrowers applying for loan forgiveness had to certify that the funds were used on eligible expenses.
The United States alleged that The Bloom Firm, directed by Bloom and Pollock, falsely certified using PPP funds for eligible payroll expenses. It was contended that the firm paid employees who were either ineligible or did not work during the 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,” stated Principal Deputy Assistant Attorney General Brian M. Boynton. “The department is committed to pursuing those who misused this taxpayer-funded program.”
U.S. Attorney Martin Estrada for the Central District of California emphasized, “Attorneys have a duty to follow the law – especially when it comes to government programs aiding individuals and businesses impacted by COVID-19.”
The settlement resolved claims brought under the qui tam provision of the False Claims Act, allowing private parties to file suit on behalf of the United States and share in any recovery. Liberty Law Office Inc., which filed the lawsuit captioned U.S. ex rel. Liberty Law Office Inc. v. The Bloom Firm et al., Dkt. No. 21-cv-06279 (C.D. Cal.), will receive approximately $44,000 from the settlement.
This resolution resulted from coordinated efforts between various branches within the Civil Division and the U.S. Attorney’s Office for the Central District of California, with assistance from multiple SBA offices.
Trial Attorney F. Elias Boujaoude and Assistant U.S. Attorney Aaron Kollitz handled this matter.
In May 2021, a COVID-19 Fraud Enforcement Task Force was established by the Attorney General to enhance efforts against pandemic-related fraud through coordination among various agencies.
For more information about reporting potential fraud related to COVID-19 relief programs or other inquiries related to pandemic response efforts can be found at www.justice.gov/coronavirus or by contacting relevant hotlines listed on their site.
It should be noted that these claims are allegations only; there has been no determination of liability.