Complaint Under the False — No. 1:24-cv-00373 (Dkt. 1, W.D. Mich.)

Summary

A qui tam complaint under the False Claims Act filed in the U.S. District Court for the Western District of Michigan, Case 1:24-cv-373, on April 10, 2024 by relator GNGH2 Inc. against Rosler Metal Finishing USA LLC, also known as Roesler Metal Finishing USA LLC, of Battle Creek, Michigan. The relator alleges that the defendant, a subsidiary of Rosler Holding GmbH with significant operations in China, certified on Form 2483-SD that no China-based entity held 20 percent or more of it and that it met SBA size standards, then received a second-draw PPP loan of $1,265,035 on or about January 27, 2021, later forgiven. It says the United States paid $1,270,337.75 on the loan and $38,110 in processing fees, and it seeks judgment of $3,925,343.65 in treble damages plus civil penalties under 31 U.S.C. Section 3729. The complaint states it is filed under seal.

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FILED - GR
April 10, 2024 1:41 PM

David Abrams, Attorney at Law (NY 3051604) ue pienaeT COURT
. TERN DISTRICT OF MICHIGAN
PO Box 3353 Church Street Station De scaweoe?. Key

New York, NY 10008
212-897-5821 dnabrams@gmail.com

1:24-cv-373
United States District Court Spegetio ager il
Western District of Michigan

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

ROSLER METAL FINISHING USA LLC
a/k/a ROESLER METAL FINISHING
USA LLC,

Complaint Under the False
Claims Act

Defendant.

Plaintiff-Relator, complaining of the Defendants by its attorney, David
Abrams, Attorney at Law, respectfully sets forth and alleges as follows:
I. Nature of the Case
ls 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.
II. ‘Parties

2. Defendant ROSLER METAL FINISHING USA LLC a/k/a ROESLER
METAL FINISHING USA LLC ("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.

S: 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.
Vv. 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]
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
1/27/2021 $1,265,035 6834488303 7/2/2021

13. Thus, on or about January 27, 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. At all times relevant to this matter, the Defendant was a subsidiary of an
entity known as Rosler Holding GmbH 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 websites 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.
24. The United States paid some $1,270,337.75 in respect of the above loan.
25. Additionally, the United States paid $38,110 in processing fees in respect of
the above loan.

26. Accordingly, Relator seeks judgment in the amount of $3,925,343.65
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
April 8, 2024
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