Complaint — United States ex rel. GNGH2 Inc. v. Seven Hills Inc. (Dkt. 1, W.D. Tex.)

Summary

GNGH2 Inc., a New Jersey corporation, filed this qui tam complaint under the False Claims Act on 04/22/22 in the Western District of Texas, Case 5:22-cv-00399-DAE, against Seven Hills Inc., a Pennsylvania corporation based in Mechanicsburg that operates restaurants; the complaint is marked to be filed under seal. The relator alleges Seven Hills received $8,891,996.94 under the Restaurant Revitalization Act while too large to qualify, by fraudulently certifying its eligibility. Venue rests on Seven Hills' operation of a Sbarro restaurant in San Antonio, Texas. Through attorney David Abrams, the relator seeks judgment of $26,675,990.82 for the United States, plus civil penalties, costs, interest and a qui tam award.

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Case 5:22-cv-00399-DAE              Document 1     Filed 04/22/22      Page 1 of 4


                                                                                 FILED
David Abrams, Attorney at Law #3051604
P0 Box 3353 Church Street Station                                                    APR 222022
New York, New York 10008                                                     CLERK, U2. DISTRICT COURT
Tel. 212-897-5821 Fax 212-897-5811                                          WISTERN DIS1ThCT F TEXAS
dnabramsgmai1.com                                                              Iv        1v
                                                                                      DEPUTY CLERK
United States District Court                    TO BE FILED UNDER SEAL
Western District of Texas


United States of America ex ret.
GNGH2 Inc.,
do David Abrams
P0 Box 3353 Church St Stn
New York, NY 10008

                        Plaintiff-Relator,

                 - against                                              Index No.:

SEVEN HILLS INC.
5010 Lenker St Suite 100,
Mechanicsburg PA 17050;
                                                               SA22CA0399
                                                                        Complaint
                                                                                              J Ji(p
                        Defendant.


       Plaintiff-Relator, complaining of the Defendant by its attorney, David Abrams, Attorney

at Law, respectfully sets forth and alleges as follows:

I.     Nature of the Case

1.     This is a false claims act claim. The Qui Tam Plaintiff and Relator, GNGH2 Inc.

("Relator"), alleges that the Defendant fraudulently obtained disaster relief under the Restaurant

Revitalization Act means of fraudulent certifications of eligibility.

II.    Parties

2.     Plaintiff-Relator GNGH2 is a New Jersey corporation.

         Case 5:22-cv-00399-DAE           Document 1       Filed 04/22/22     Page 2 of 4




3.     Defendant Seven Hills Inc. ("Seven Hills") is a Pennsylvania Corporation with a

principle place of business in Mechanicsburg, Pennsylvania.

4.     Seven Hills operates a number of restaurants throughout the United States.

III    Jurisdiction and Venue

5.      This Court has Federal Question jurisdiction over this matter in that Relator asserts

claims under the False Claims Act, a federal statute.

6.     This Court has personal jurisdiction over the Defendant in that personal jurisiction under

the False Claims Act is based on the Defendants' contacts with the United States as a whole. In

this case, the Defendant is located in the United States and in any event this matter arises from

the Defendant's application for and receipt of a federal grant.

7.     This matter is venued in the Western District of Texas based on the Defendant's operation

of a Sbarro restaurant in San Antonio, Texas.

V.     Background

       Throughout most of 2020, the United States was faced with a large scale outbreak of the

virus commonly known as "Coronavirus" and "COVID-19." (the "Coronavirus Epidemic").

9.     In addition to the Coronavirus Epidemic itself, the United States was faced with large

scale outbreaks of panic and hysteria as a result of the Coronavirus Epidemic.

10.    All of the above has resulted in major economic disruption and as a result Congress

enacted various measures including the Restaurant Revitalization Act ("RRA") which was

intended to provide relief to restaurants and small restaurant chains which lost business due to

lockdowns and other measures which were enacted as a result of the above-described hysteria.




                                                  2

         Case 5:22-cv-00399-DAE                 Document 1    Filed 04/22/22    Page 3 of 4




11.     The Defendant applied for and received relief under the RRA as follows:

Date            Party                                                          Amount

5/22/202 1      Seven Hills Inc.                                               $8,891,996.94

12.     The Defendant was too large in terms of it operations to qualify for such relief and

fraudulently certified as to its eligibility.

VI.     (Count I) Violation of the False Claims Act

13.     The False Claims Act imposes liability on a person or entity who "knowingly makes,

uses, or causes to be made or used, a false record or statement material to a false or fraudulent

claim" 31 U.S.C. Section 3729(a)(1)(B)

14.     The Courts have held that this can include false statements regarding eligibility to

participate in a program. See United States ex rel. Kirk v. Schindler Elevator Corp., 601 F.3d

94, 116 (2d Cir. 2010), rev'd on other grounds, 131 S.Ct. 1885 (2011) ("[C]laims may be false

even though the services are provided as claimed if, for example, the claimant is ineligible to

participate in the program.")

15.     Thus, the Defendants' certifications of eligibility violated the False Claims Act because

they were false and required for eligibility for disaster relief.

VII.    Relief Sought

16.     On behalf of the government, Relator is seeking judgment for the triple damages and

civil penalties set forth in 31 U.S.C. Section 3729.

17.      The Defendants received at least approximately $8,891,996.94 in disaster relief as a

result of the certifications set forth above.




                                                     3

         Case 5:22-cv-00399-DAE           Document 1        Filed 04/22/22      Page 4 of 4




18.    Accordingly, Relator seeks judgment in the amount of $26,675,990.82 against the

Defendants and in favor of the United States, together with costs, interest, civil penalties, an

appropriate qui tam award, and such other and further relief as the Court deems just.

                                       Respectfiully submitted,




                                       David Abrams, Attorney at Law
                                        Attorney for Relator
                                       GNGH2 Inc.

                                       P0 Box 3353 Church Street Station
                                       New York, NY 10008
                                       Tel. 212-897-5821
                                       dnabramsgmai1.com
Dated: New York, NY
       April 21, 2022

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Complaint — No. 5:22-cv-00399 (Dkt. 1, W.D. Tex.)