LOS ANGELES
A Calabasas-based law firm called The Bloom Firm and Lisa Bloom and Braden Pollock, two members of the firm’s senior management, have agreed to pay a total of $274,000 to resolve claims that they broke the False Claims Act, officials stated.
They knowingly provided false information in support of a Paycheck Protection Program (PPP) loan forgiveness application, according to authorities.
Congress created the PPP in March 2020 as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act to provide emergency financial support to the millions of Americans suffering economic hardship due to the COVID-19 pandemic.
The CARES Act authorized billions of dollars in forgivable loans to small businesses struggling to pay employees and other business expenses.
The claims resolved by the settlement are allegations only. There has been no determination of liability, officials stated.
In December 2020, Congress approved funding for a “second draw” of PPP loan funds, which became available to borrowers beginning in January 2021. An entity’s first PPP loan is often referred to as a “first draw” PPP loan.
When applying for the 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 PPP loan funds on eligible expenses, such as payroll, officials stated.
The federal government alleged that, at the direction and with the assistance of Lisa Bloom and Braden Pollock, 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.
The federal government contended that The Bloom Firm used a portion of its PPP loan to pay several employees who were ineligible to receive PPP funds or did not work for the firm during the loan’s covered period.
As a part of the settlement announced Thursday, The Bloom Firm will pay $204,200.34, and Lisa Bloom and Braden Pollock will each pay $35,384.49.
“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.”
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Justice Department in partnership with agencies across the government to enhance efforts to combat and prevent pandemic-related fraud.