On August 15, the Department of Justice (DOJ) announced that a California Law firm, The Bloom Firm, and its senior managers, Lisa Bloom and Braden Polloc, agreed to pay $274,000 to settle False Claims Act allegations. The government alleges that the firm knowingly submitted false information to support a loan forgiveness application for the Paycheck Protection Program (PPP).
The Paycheck Protection Program (PPP) was established by Congress in March 2020, as part of the Coronavirus Aid, Relief and Economic Security (CARES) Act. The program aimed to provide emergency loans to small businesses that were struggling due to the COVID-19 pandemic. Only small businesses were eligible for PPP loans, which depended on several factors such as the number of employees, amount of revenues, and net worth of the applicant, along with any other corporate affiliates that share common operational control.
In May 2021, the U.S. Department of Justice (DOJ) announced the establishment of the COVID-19 Fraud Enforcement Task Force. The Task Force aims to “marshal the resources of the Department of Justice in partnership with agencies across government to enhance enforcement efforts against COVID-19 related fraud.”
The settlement with The Bloom Firm stems from a qui tam whistleblower lawsuit filed by Liberty Law Office Inc. Liberty Law Office Inc. is set to receive a total of $44,000 in connection with the settlement. The False Claims Act’s qui tam provisions enable private citizens and private parties to file lawsuits on behalf of the government if they know of an individual or company defrauding the government. Qui tam whistleblowers are eligible to receive between 15 and 30% of the government’s recovery.
According to the government, with the direction of Managers Lisa Bloom and Braden Polloc, “the Bloom Firm sought and obtained forgiveness of the firm’s first draw PPP loan by falsely certifying that the firm used the PPP loan funds for eligible payroll expenses.” However, the government has affirmed that the firm used the PPP loans to pay ineligible employees. The total $274,000 paid to settle allegations is split between the Bloom Firm, paying $204,200.34, and Bloom and Pollock, each paying $35,384.49.
“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.”
“PPP loans were intended to provide critical relief to small businesses,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The department is committed to pursuing those who misused this taxpayer funded program.”
In July 2023, a bipartisan group of senators introduced the False Claims Amendments Act of 2023, which address a few technical loopholes undermining the success of the FCA. The bill is widely supported by whistleblower advocates.
National Whistleblower Center (NWC) has issued an Action Alert calling on Congress to pass the bill.
Join NWC in Taking Action:
Demand that Congress strengthen the False Claims Act
Further Reading:
Bipartisan Legislation Unveiled to Strengthen False Claims Act