On March 12, the U.S. Department of Justice (DOJ) announced that Florida businessman Patrick Walsh and the 10 companies he represented agreed to enter in a $20 million consent judgment to resolve allegations they violated the False Claims Act (FCA) through pandemic relief fraud.
The judgement stems from a qui tam whistleblower suit filed by Andrew Hersh, who performed information technology services for Walsh.
According to the DOJ, Walsh provided false information about his companies’ employee rosters and payrolls in support of Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) loan applications.
“Some of the entities for which Walsh submitted loan applications were dormant or inactive,” the government states. The DOJ further alleges that “Walsh used those loan proceeds for impermissible personal purposes, including the purchase of a private island, investment in Texas oil interests, and paying off personal debts.”
“PPP and EIDL loans were intended to help small businesses during the pandemic,” said Acting Assistant Attorney General Yaakov M. Roth of the Justice Department’s Civil Division. “The department is committed to holding accountable those who undermined the purpose of these programs by knowingly obtaining and retaining loan proceeds for which they were not eligible.”
During FY 2024, settlements and judgments under the False Claims Act exceeded $2.9 billion and over $2.4 billion of the recoveries stemmed from qui tam whistleblower lawsuits. Furthermore, according to the government, a record 979 qui tam lawsuits were filed in FY 2024.
However, in September 2024, a district judge in Florida ruled that the False Claims Act’s qui tam provisions were unconstitutional. The U.S. federal government is urging the U.S. Court of Appeals for the Eleventh Circuit to reverse that decision, stating in a brief that “other than the district court here, every court to have addressed the constitutionality of the False Claims Act’s qui tam provisions has upheld them.”
National Whistleblower Center has issued an Action Alert allowing whistleblower supporters to write the members of Congress urging them to protect and strengthen and protect the False Claims Act.
The claims asserted in this case are allegations only, and there has been no determination of liability.
Join NWC in Taking Action:
Strengthen the False Claims Act and Protect it From Attack
