A Texas-based roofing giant has agreed to cough up $9 million in a settlement over allegations of PPP loan fraud, officials said Monday. Empire Roofing, Inc., which presides over a consortium of affiliated roofing and disposal companies nationally, was accused of falsely claiming their smaller business status to pilfer funds meant for genuinely small businesses rocked by the pandemic.
Embattled by the economic deluge unleashed by COVID-19, Congress threw a lifeline through the Paycheck Protection Program (PPP) as a segment of the CARES Act back in March 2020. Eligibility hinged on several criteria, primarily a workforce count capped at 500 workers for businesses. Falling afoul of this, Empire Roofing affiliates certified their small business size when, in fact, the combined employee tally of its network surpassed this limit, thus not being entitled to the forgivable loans they received.
United States Attorney for the Northern District of Texas, Leigha Simonton, stated, "PPP loans were intended to help small businesses during the COVID-19 pandemic." She continued, "Our office invests significant time and resources to hold accountable those who obtained PPP funds for which they were not eligible and will continue to do so going forward", as per the Department of Justice.
The suit, initiated by a whistleblower under the qui tam provision of the False Claims Act, highlighted the collaborative vigilance of the SBA and the Department of Justice against PPP abuses. "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," SBA General Counsel Therese Meers professed, with Empire Roofing cornered into settlement territory, without admitting to civil liability, per the Department of Justice.
The settlement, encompassing a lawsuit captioned United States ex rel. Sidesolve v. Empire Roofing, Inc., et al., No. No. 3:22-CV-2060-B (N.D. Tex.), also benefits the whistleblower, Sidesolve, Inc., with a $1 million cut. The case was managed by Assistant United States Attorneys William Admussen and Andrew Robbins, and SBA’s Sandra Mazzoni chipped in with her assistance.
