U.S. ex rel. Falzarano v. Kingwood International Resort, LLC, et al.

Case summary

In March 2023 Kingwood Orlando Reunion Resort LLC and Kingwood Crystal River Resort Corp., related Florida companies that operate separate resorts, agreed to pay a total of $325,000. The payment settled allegations over a Paycheck Protection Program loan forgiveness application submitted by Crystal River. The companies were alleged to have violated the False Claims Act and the Financial Institutions Reform, Recovery and Enforcement Act by knowingly providing false information in support of that application. The claims are allegations only, and there has been no determination of liability.¹

Both companies had received their own PPP loans. The government alleged that Crystal River sought forgiveness of its loan in part by certifying that it had used PPP funds to pay wages of Crystal River employees. Some of those employees, it alleged, were actually Orlando Reunion employees whom Crystal River did not employ or pay. According to the settlement announcement, a PPP recipient seeking forgiveness based on wages was entitled to forgiveness only for wages actually paid to its employees during the designated period.¹

The $325,000 breaks down as $271,720 in damages and penalties under the False Claims Act and $53,280 in civil penalties under the Financial Institutions Reform, Recovery and Enforcement Act.¹

The settlement resolved a whistleblower lawsuit filed by the former director of human resources for the Kingwood resorts, captioned U.S. ex rel. Falzarano v. Kingwood International Resort, LLC, et al., No. 6:20-cv-976-ORL-37EJK, in the Middle District of Florida. Under the False Claims Act's qui tam provisions, the whistleblower is entitled to a share of the government's recovery; here it came to about $46,000.¹

Trial Attorney Jared S. Wiesner of the Justice Department's Civil Division and Assistant U.S. Attorney Jeremy R. Bloor for the Middle District of Florida handled the matter, with the SBA's Office of General Counsel and Office of Inspector General assisting.¹

Notes

1. U.S. Attorney's Office for the Middle District of Florida, "Florida Resorts Agree to Pay $325,000 to Settle False Claims Act Allegations Relating to False Certifications on a Paycheck Protection Program Loan Forgiveness Application" (original), March 21, 2023. ↩₁ ↩₂ ↩₃ ↩₄ ↩₅

Summary written from the documents on this page; every sentence is sourced.