DECEMBER 12, 2023. Empire Roofing, Inc. (Empire), a Texas-based commercial roofing contractor, along with its national network of roofing and disposal companies have agreed to pay $9 million to settle allegations that eight affiliates falsely certified that they were eligible to receive loans through the Paycheck Protection Program (PPP), enacted during the COVID-19 pandemic. The allegations were revealed by a whistleblower, a corporate entity, who will be compensated for its efforts.
PPP loans were created by Congress in March 2020 at the start of the pandemic as one section of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Its purpose was to provide emergency loans to small businesses that were in danger due to the pandemic business shutdowns. Applicants qualified for loans based on several factors, one of which was the number of employees, including the employees of its affiliates. Only businesses with fewer than 500 employees were able to receive loans through the program, and applicants were required to certify that they met all requirements before submitting applications.
Empire and its affiliates applied for and received $6.7 million in PPP loans, which were forgiven in full. Each application claimed that they were a small business and employed fewer than 500 people. The government alleged that Empire and its affiliates employed more than 500 people at the time they submitted applications for PPP loans, thus disqualifying them for the loans and for loan forgiveness under the CARES Act. Empire and its affiliates falsified these applications to ensure they would receive loans.
The Small Business Administration’s General Counsel was pleased with the settlement, stating that “The settlement in this matter demonstrates the excellent results achieved through the combined efforts of SBA and the Department of Justice to uncover and forcefully respond to PPP misconduct … The federal government is strongly committed to identifying and aggressively pursuing any instances of fraud or misconduct within the Paycheck Protection Program.”
The relator, Sidesolve, Inc., filed a whistleblower complaint under the False Claims Act, exposing the fraudulent behavior of Empire and its affiliates. For its efforts, Sidesolve will receive $1 million.
If you would like to report CARES Act or other government programs fraud, you can contact attorneys at Tycko & Zavareei LLP. Eva Gunasekera and Renée Brooker are former officials of the United States Department of Justice and prosecuted whistleblower cases under the False Claims Act. Renée served as Assistant Director at the United States Department of Justice, the office that supervises False Claims Act cases in all 94 United States District Courts. Eva was the Senior Counsel for Health Care Fraud. Eva and Renée now represent whistleblowers. For a free consultation, you can contact Renée at [email protected] (tel.: 202-417-3664) or contact Eva Gunasekera at [email protected]. You can also go to Tycko & Zavareei LLP’s website for whistleblowers to learn more at www.fraudfighters.net/.