Engineered Structures, Inc. (ESI), a construction company based in Meridian, Idaho, has agreed to pay $5.75 million to resolve civil fraud allegations related to its receipt of a Paycheck Protection Program (PPP) loan during the COVID-19 pandemic.
The settlement stems from a lawsuit filed under the whistleblower provision of the False Claims Act. The suit, United States ex rel. Karen Bloomfield v. Engineered Structures Inc., allowed a private party to bring claims on behalf of the federal government regarding alleged false statements made for federal funds.
According to the complaint, ESI obtained an $8.6 million PPP loan for which it was not eligible. The allegations state that ESI should have included temporary workers from staffing agencies in its employee count, which would have put its average number of employees above 500 and rendered it ineligible for PPP funding. The complaint also alleges that ESI made false statements on its PPP Loan Necessity Questionnaire.
After the U.S. government chose not to formally intervene in the case, the whistleblower continued with litigation independently. ESI then agreed to settle by paying $5.75 million, with a portion going to the whistleblower as part of their share in accordance with provisions under the False Claims Act.
Assistant U.S. Attorney Gerard Mene and representatives from the U.S. Small Business Administration managed this matter.
The settlement resolves civil claims that are only allegations; there has been no finding or determination of liability against ESI.
More information about this case is available on PACER under case number 1:22-cv-789 and on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.
