Complaint — GNGH2 Inc. v. BLEISTAHL NORTH AMERICA LP (No. 1:24-cv-00476, W.D. Mich.)

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A qui tam complaint under the False Claims Act, marked to be filed under seal, by relator GNGH2 Inc. against BLEISTAHL NORTH AMERICA LP, Case 1:24-cv-00476-PLM-RSK in the United States District Court for the Western District of Michigan, filed May 6, 2024 as ECF No. 1. The relator alleges that the defendant, a subsidiary of Bleistahl GmbH & Co Holding KG, falsely certified on Form 2483-SD on or about March 4, 2021 that no entity with significant operations in the People's Republic of China owns or holds not less than 20 percent of its economic interest, and did not conform to SBA size standards. It states that the defendant received a $1,300,305 second draw PPP loan that was forgiven, that the United States paid some $1,307,180.59 on the loan and $39,009.15 in processing fees, and it seeks judgment of $4,038,569.22.

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. Case 1:24-cv-00476-PLM-RSK ECF No.1, PagelD.1

David Abrams, Attorney at Law (NY 3051604)
PO Box 3353 Church Street Station

New York, NY 10008

212-897-5821 dnabrams@gmail.com

United States District Court
Western District of Michigan

Filed 05/06/24. Page1of7

FILED -GR

May 6, 2024 1:35 PM
CLERK OF COURT
U.S. DISTRICT COURT
WESTERN DISTRICT OF MICHIGAN

BY: KB SCANNED BY: UW /_3-

1:24-cv-476
Jane M. Beckering
U.S. District Judge

TO BE FILED UNDER
United States of America ex rel. SEAL
GNGH2 Inc.,
Plaintiff-Relator,
- against - Case No.

BLEISTAHL NORTH AMERICA LP,

Complaint Under the False

Defendant.

Claims Act

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 CARES Act

disaster relief by means of fraudulent certifications of eligibility. As set forth in

more detail below, second-round PPP funding is barred to entities which are owned

by concerns with significant operations in the People's Republic of China and to

entities which exceed size standards.
_ Case 1:24-cv-00476-PLM-RSK ECF No.1, PagelD.2 Filed 05/06/24 Page 2 of 7

II. Parties

2. Defendant BLEISTAHL NORTH AMERICA LP ("Defendant") is a
Michigan limited liability company with a principal place of business in Calhoun
County, Michigan.

3. The Relator, GNGH2 Inc. ("Relator" or "Plaintiff") is a New Jersey
corporation with a principal office in Bergen County, New Jersey.

III. Compliance with Requirements of Suit

4. This matter will be filed under seal pursuant to 31 U.S.C. Section 3730(b)
and at or about the same time, a copy of the Complaint, any Sealing Order, and
Relator's disclosure of evidence will be served on the Department of Justice and
the United States Attorney for the District in which this matter has been filed.

5. Relator will not serve the Complaint or any other papers in this matter until
and unless it becomes unsealed. Thus, if the Complaint is served on the
Defendant, it means that the matter has been duly unsealed.

IV. Jurisdiction and Venue

6. This Court has jurisdiction pursuant to 31 U.S.C. Section 3732(a) which
provides that this type of action may be brought in any district where any
Defendant resides or transacts business. In this case, the Defendant's principal

office is located in Battle Creek, Michigan.
_ Case 1:24-cv-00476-PLM-RSK ECFNo.1, PagelD.3 Filed 05/06/24 Page 3 of 7

V. Background

7. Throughout most of 2020 and continuing into 2021, the United States was
faced with a large scale outbreak of the virus commonly known as "Coronavirus"
and "COVID-19." (the "Coronavirus Epidemic").

8. 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.

9. All of the above has resulted in major economic disruption and as a result
Congress enacted the Coronavirus Aid, Relief, and Economic Security Act,
commonly known as the "CARES Act."

10. The CARES Act contains a provision which permitted qualifying business
which were affected by the foregoing disruption to obtain forgivable disaster loans.
11. The CARES Act was subsequently amended to provide for a second round
of disaster funding. Significantly, an applicant is ineligible for such funding if is
owned by a concern with significant operations in the People's Republic of China
or if, when combined with its affiliates, it exceeds applicable size standards.

[continued on next page]
_ Case 1:24-cv-00476-PLM-RSK ECFNo.1, PagelD.4 Filed 05/06/24 Page4of/7

12. The Defendant in this matter is firm which manufactures equipment for

surface finishing and 3D printing. It received second draw PPP disaster relief as

follows:
Date Amount Loan # Forgiven
3/4/2021 $1,300,305 6603078508 9/22/2021

13. Thus, on or about March 4, 2021, Defendant completed Form 2483-SD
which required it to certify as follows:

The Applicant is not a business concern or entity (a) for which an entity
created in or organized under the laws of the People’s Republic of China or
the Special Administrative Region of Hong Kong, or that has significant
operations in the People’s Republic of China or the Special Administrative
Region of Hong Kong, owns or holds, directly or indirectly, not less than 20
percent of the economic interest of the business concern or entity, including
as equity shares or a capital or profit interest in a limited liability company
or partnership; or (b) that retains, as a member of the board of directors of
the business concern, a person who is a resident of the People’s Republic of
China

14. This certification was false when made as set forth below.

15. Atall times relevant to this matter, the Defendant was a subsidiary of an
entity known as Bleistahl GmbH & Co Holding KG which has significant
operations in China. Additionally, the Defendant and its affiliates did not conform
to the SBA's applicable size standards in contradiction to another certification.

16. Moreover, the foregoing information is available on the website and/or

corporate filings of the Defendant and/or its corporate parent.
17. Thus, Defendant's authorized representative must have been either aware of
this information or reckless in regards to same.

18. Thus, Defendant made a fraudulent representation when it completed form
2483-SD and certified eligibility in respect of the above matters.

19. As aresult of these statements, the Defendant received (and the United
States paid) substantial funds to which it would not otherwise have been entitled.
VI. (Count I) Violation of the False Claims Act

20. 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)

21. 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.")
22. Thus, the Defendant's certifications of eligibility violated the False Claims
Act because they were false and required for eligibility for disaster relief.

VII. Relief Sought

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

and civil penalties set forth in 31 U.S.C. Section 3729.
Case 1:24-cv-00476-PLM-RSK ECF No.1, PagelD.6 Filed 05/06/24 Page 6of7

24. The United States paid some $1,307,180.59 in respect of the above loan
which consists of the loan amount plus a modest amount of interest.

25. Additionally, the United States paid $39,009.15 in processing fees in respect
of the above loan.

26. Accordingly, Relator seeks judgment in the amount of $4,038,569.22
against the Defendant 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.

Respectfully submitted,

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

PO Box 3353 Church Street Station
New York, NY 10008
Tel. 212-897-5821
Fax 212-897-5811
Dated: Delhi, New York
May 3, 2024
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