Complaint — United States ex rel. The Tarbell Group, LLC v. Mid-Eastern Athletic Conference (E.D. Va.)

Summary

A qui tam complaint under the False Claims Act, filed in camera and under seal, by relator The Tarbell Group, LLC in United States ex rel. The Tarbell Group, LLC v. Mid-Eastern Athletic Conference, et al., Case 1:24-cv-00849-LMB-LRV, in the United States District Court for the Eastern District of Virginia, filed May 21, 2024 as Document 1. It alleges that each defendant is a tax-exempt 501(c)(4) organization, a category the complaint says was always excluded from PPP eligibility, and that each falsely certified eligibility. The defendants include Mid-Eastern Athletic Conference, Road Runners Club of America, Virginia Rush Soccer, Inc. and Metropolitan Business League. The complaint lists each loan, including a $285,500.00 first-draw loan to Mid-Eastern Athletic Conference, and seeks three times the forgiven amounts plus civil penalties.

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“Complaint — United States ex rel. The Tarbell Group, LLC v. Mid-Eastern Athletic Conference (E.D. Va.).” Original at archive.org. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/complaint-no-1-24-cv-00849-dkt-1-e-d-va-786ab69702/, SHA-256 e44199575ae4ed65a60a035125bd1ac88d9d9de28924eaf40a410065d92dd6a5.

Full text

Case 1:24-cv-00849-LMB-LRV Document 1 Filed 05/21/24 Page 1 of 6 PageID# 1

iflLEQ
UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA

m MAY 21 P 11=55
United States ofAmerica ex. rel.
The Tarbell Group, LLC,

, Plaintiff

Mid-Eastern Athletic Conference,
Employee Activity Association, Inc.,
Case No. j:
Road Runners Club of America,
Virginia Rush Soccer, Inc.,
Cheers,
Metropolitan Business League, and
Glen Allen Community Center,

Defendants.

Filed in camera and under seal pursuant to 31 U.S.C.§ 3730(b)(2)

COMPLAINT

, Nature of the Claim

1. Relator The Tarbell Group, LLC brings this action for itself and the United States

under the False Claims Act, 31 U.S.C. §§ 3729 et seq. to recover funds illegally obtained by

Defendants under federal COVID-19 relief laws.

Jurisdiction and Venue

2. The Court hasjurisdiction over, and is the appropriate venue for, this matter because

it arises under a federal law, because the United States is a plaintiff, and because in this judicial

district all Defendants can be found, reside, transact business in, or committed an act proscribed

by the False Claims Act. 28 U.S.C. §§ 1331, 1345; 31 U.S.C. § 3732(a).
Case 1:24-cv-00849-LMB-LRV Document 1 Filed 05/21/24 Page 2 of 6 PageID# 2

Parties

3. Relator The Tarbell Group, LLC is a limited liability company located in and

organized under the laws ofthe Commonwealth of Virginia.

4. Defendant Mid-Eastern Athletic Conference is an entity exempt from taxation

under section 501(c)(4) of the Internal Revenue Code, 26 U.S.C. § 501(c)(4) ("Tax-Exempt

501(c)(4) Organization") with its principal place of business at 2730 Ellsmere Avenue in Norfolk,

Virginia(Independent City of Norfolk).

5. Defendant Employee Activity Association, Inc., is a Tax-Exempt 501(c)(4)

Organization with its principal place of business at 1306 Vincent Place in McLean, Virginia

(Fairtax County).

6. Defendant Road Runners Club ofAmerica is a Tax-Exempt 501(c)(4) Organization

with its principal place of business at 1501 Lee Highway, Suite 140, in Arlington, Virginia

(Arlington County).

7. Defendant Virginia Rush Soccer, Inc., is a Tax-Exempt 501(c)(4) Organization with

its principal place of business at 2044 Landstown Center Way in Virginia Beach, Virginia

(Independent City of Virginia Beach).

8. Defendant Cheers is a Tax-Exempt 501(c)(4) Organization with its principal place

of business at 210 Giant Drive in Richmond, Virginia(Independent City of Richmond).

9. Defendant Metropolitan Business League is a Tax-Exempt 501(c)(4) Organization
/
with its principal place of business at 707 East Main Street, Suite 1615, in Richmond, Virginia

(Independent City of Richmond).
Case 1:24-cv-00849-LMB-LRV Document 1 Filed 05/21/24 Page 3 of 6 PageID# 3

10. Defendant Glen Allen Community Center is a Tax-Exempt 501{c)(4) Organization

with its principal place of business at 10800 Brookley Road in Glen Allen, Virginia (Henrico

County).

Background

11. To provide economic relief and stimulate the economy during the COVID-19

pandemic, Congress in 2020 enacted the Coronavirus Aid, Relief, and Economic Security Act,

Pub. L. 116-136,amended by,inter alia, the Paycheck Protection Program Flexibility Act of2020,

Pub. L. 116-142 and the American Rescue Plan Act of 2021, Pub. L. 117-2(2021)(together with

implementing regulations, referred to herein as the "PPP Program"). The PPP Program effectively

transferred money from the federal government to eligible recipients via the United States Small

Business Administration ("SBA"). The transfers took the form of private loans guaranteed,

forgiven and reimbursed by SBA("PPP Loans"). PPP Loan recipients could receive loans in up to

two tranches, each called a "draw," i.e., first-draw and second-draw PPP Loans.

12. As a condition ofreceiving PPP Loans and forgiveness thereof, each applicant was

required to certify its eligibility under the PPP Program.

13. The PPP Program at all times expressly excluded Tax-Exempt 501(c)(4)

Organizations from eligibility. Such organizations were never eligible to receive PPP Loan;-..

14. Each defendant is a Tax-Exempt 501(c)(4) Organization and was therefore

ineligible to receive PPP Loans.

PPP Loans

15. Mid-Eastern Athletic Conference applied and was approved for a first-draw PPP

Loan on April 14, 2020(loan number 7553267102), in the amount of $285,500.00, received said

PPP Loan, and had said PPP Loan forgiven on May 11, 2021, in the amount of$288,497.75.
Case 1:24-cv-00849-LMB-LRV Document 1 Filed 05/21/24 Page 4 of 6 PageID# 4

16. Mid-Eastern Athletic Conference applied and was approved for a second-draw PPP
/

Loan on February 18, 2021 (loan number 1336418505), in the amount of $225,000.00, received

said PPP Loan, and had said PPP Loan forgiven on July 21,2021,in the amount of$225,943.75.

17. Employee Activity Association,Inc., applied and was approved for a first-draw PPP

Loan on April 9, 2020 (loan number 9834137006), in the amount of $126,146.47, received said

PPP Loan,and had said PPP Loan forgiven on May 12, 2021,in the amount of$127,492.03.

18. Employee Activity Association, Inc., applied and was approved for a second-draw

PPP Loan on January 28,2021 (loan number 7668828307),in the amount of$136,030.00,received

said PPP Loan,and had said PPP Loan forgiven on June 1, 2022, in the amount of$137,828.62.

19. Road Runners Club ofAmerica applied and was approved for a first-draw PPP Loan

on May 21, 2020 (loan number 1394087809), in the amount of $65,028.00, received said PPP

Loan, and had said PPP Loan forgiven on December 23,2020, in the amount of$65,402.13.

20. Road Runners Club of America applied and was approved for a second-draw PPP

Loan on February 18, 2021 (loan number 1217148504), in the amount of $65,027.00, received

said PPP Loan, and had said PPP Loan forgiven on September 9, 2021, in the amount of

$65,385.09.

21. Virginia Rush Soccer, Inc., applied and was approved for a first-draw PPP Loan on

April 8,2020(loan number 8477007009),in the amount of$111,000.00, received said PPP Loan,

and had said PPP Loan partially forgiven on November 27,2020, in the amount of $111,690.67.

22. Virginia Rush Soccer,Inc., applied and was approved for a second-draw PPP Loan
/
on February 14, 2021 (loan number 8953368402), in the amount of $111,000.00, received said

PPP Loan, and had said PPP Loan partially forgiven on July 21, 2021, in the amount of

$111,410.08.
Case 1:24-cv-00849-LMB-LRV Document 1 Filed 05/21/24 Page 5 of 6 PageID# 5

23. Cheers applied and was approved for a first-draw PPP Loan on April 14,2020(loan

number 6545567104), in the amount of $62,970.00, received said PPP Loan, and had said PPP

Loan forgiven on April 5, 2021, in the amount of $63,552.47.

24. Cheers applied and was approved for a second-draw PPP Loan on April 11, 2021

(loan number 2099438805), in the amount of $34,940.00, received said PPP Loan, and had said

PPP Loan forgiven on November 2,2021, in the amount of$35,123.43.

'25. Metropolitan Business League applied and was approved for a first-draw PPP Loan
on April 28, 2020 (loan number 7242167208), in the amount of $37,300.00, received said PPP

Loan,and had said PPP Loan forgiven on October 13, 2020, in the amount of $37,463.71.

26. Metropolitan Business League applied and was approved for a second-draw PPP

Loan on February 4,2021 (loan number 2953238401),in the amount of$37,300.00, received said

PPP Loan, and had said PPP Loan forgiven on December 6,2021, in the amount of$37,602.54.

27. Glen Allen Community Center applied and was approved for a first-draw PPP Loan

on February 24, 2021 (loan number 3826658509), in the amount of $7,230.00, received said PPP

Loan, and had said PPP Loan forgiven on January 26,2022,in the amount of$7,296.16.
\

^ Cause of Action - False Claims Act,31 U.S.C.§ 3729
28. Relator repeats and realleges each ofthe foregoing paragraphs.

29. Each defendant did knowingly present, or cause to be presented, a false or

fraudulent claim for payment or approval, to the injury ofthe United States, by falsely ceriifying

that it was eligible for a PPP Loan when it was not, thereby receiving a PPP Loan and forgiveness

thereof.

30. Each defendant did knowingly make,use,or cause to be made or use, a false record

or statement material to a false or fraudulent claim, to the injury of the United States, by falsely
Case 1:24-cv-00849-LMB-LRV Document 1 Filed 05/21/24 Page 6 of 6 PageID# 6

certifying that it was eligible for a PPP Loan when it was not, thereby receiving a PPP Loan and

forgiveness thereof!
i
Prayer for Relief

31. WHEREFORE, Relator respectfully prays for a judgment awarding the following

relief against each defendant respectively:

a. A declaration that such defendant did violate the False Claims Act;

b. An amount thrice the amount ofPPP Loans forgiven with respect to such defendant,

plus civil penalties and applicable interest, under 31 U.S.C. § 3729(a)(1);

c. The cost of this civil action, allocated to such defendant respectively in proportion

to its share of the aggregate damages recouped herein, under 31 U.S.C.

§ 3729(a)(3);

i
I
d. An award to relator, including its reasonable expenses, attorneys' fees and costs,

under 31 U.S.C. § 3730(d)(1) or(2), as applicable; and

e. Such other relief as may be just and proper.

Demand for Jury Trial

32. Relator demands ajury trial.

Respectfully submitted.

Law Office of Bruce Ellis Fein,FLLC
Bruce Ellis Fein, Esq.
P.O. Box 506
Great Falls, VA 22066
bruce@newdream.net
703-248-0390
Attorneyfor Relator

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Our copy: 1-complaint.pdf
Original: archive.org