A Calabasas-based law firm and members of its senior management have agreed to pay $274,000 to settle allegations they violated federal law by providing false information in support of a COVID-19 loan forgiveness application, officials announced Thursday.
Federal prosecutors alleged that, at the direction and with the assistance of firm managers Lisa Bloom and Braden Pollock, the Bloom Firm sought and obtained forgiveness of the firm’s first draw Paycheck Protection Program loan by falsely certifying that the firm used the loan funds for eligible payroll expenses.
The government contended that firm used a portion of its PPP loan to pay several employees who were ineligible to receive such funds or did not work for the firm during the covered period of the loan. As a part of the settlement, the Bloom Firm will pay $204,200.34, and Lisa Bloom and Pollock will each pay $35,384.49, according to the U.S. Attorney’s Office.
Congress created the PPP in March 2020 to provide emergency financial support to the millions of Americans suffering economic hardship due to the COVID-19 pandemic. An entity’s first PPP loan is often referred to as a “first draw” PPP loan. When applying for forgiveness of any PPP loans, borrowers were required to certify the truthfulness and accuracy of all information provided in their applications, including that they spent the loan funds on eligible expenses, such as payroll.
“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,” U.S. Attorney Martin Estrada said in a statement. “This settlement reaffirms my office’s commitment to affirm and uphold the integrity of pandemic-assistance programs.”
The settlement resolved claims brought under the qui tam or whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery. The qui tam lawsuit was filed by Liberty Law Office, which will receive a total of $44,000 in connection with the settlement, according to the U.S. Attorney’s Office.