Empire Roofing settles PPP fraud allegations for $9M

Texas company accused of lying about employee count

Empire Roofing Settles PPP Fraud Allegations for $9 Million
(Illustration by The Real Deal with Getty)

A Fort Worth, Texas-based commercial roofing contractor and its affiliated companies have agreed to pay $9 million to settle allegations of violating the False Claims Act. 

The settlement, announced by U.S. Attorney Leigha Simonton, arises from accusations that Empire Roofing falsely certified the eligibility of eight affiliates to receive loans through the Small Business Administration’s Paycheck Protection Program, according to a press release by the U.S. Attorney’s office.

The PPP, established in March 2020 under the CARES Act, aimed to provide emergency loans to small businesses impacted by the COVID-19 pandemic. 

Eligibility for PPP loans depended on various factors, with businesses limited to 500 or fewer employees, and applicants were required to truthfully certify all information in their loan applications.

Empire Roofing and its affiliated businesses within a nationwide network secured $6.7 million in PPP loans, all of which were later forgiven. 

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The government alleges that the network, despite certifying as small businesses, collectively employed more than 500 individuals, rendering the affiliates ineligible for PPP loans or forgiveness.

The settlement stemmed from a lawsuit filed under the whistleblower provision of the FCA, allowing private parties to sue on behalf of the United States for false claims. 

The relator, Sidesolve, Inc., will receive a $1 million share of the $9 million settlement.

PPP fraud can also lead to criminal charges. In August, Miami agent Daniela Rendon was sentenced to prison for misusing hundreds of thousands of dollars in pandemic relief money to lease her white Bentley Bentayga, rent a luxury apartment, refinish her designer shoes and have cosmetic procedures.

Rendon was indicted in February on two counts of money laundering, seven counts of wire fraud and one count of aggravated identity theft. In April she pleaded guilty to one count of wire fraud. The other charges were dismissed. She was sentenced to three years and five months in prison, followed by three years of probation and ordered to pay nearly $200,000 in restitution. 

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