First Amended Complaint — The Tarbell Group, LLC v. Cheers, Employee Activity Association Inc. (Dkt. 3)

Summary

A First Amended Complaint in United States of America ex rel. The Tarbell Group, LLC v. Cheers, Employee Activity Association Inc. and other named defendants, Case 1:24-cv-00849-LMB-LRV, in the U.S. District Court for the Eastern District of Virginia, Document 3 filed 07/17/24. The relator brings the action under the False Claims Act, 31 U.S.C. §§ 3729-3733, and alleges that each defendant is a Tax-Exempt 501(c)(4) Organization that applied for and received PPP Loans for which it was legally ineligible. The prayer for relief asks for a declaration of False Claims Act violations, an amount thrice the PPP Loans and interest forgiven or otherwise not repaid, civil penalties, costs, and an award to the relator, and the relator demands a jury trial.

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“First Amended Complaint — The Tarbell Group, LLC v. Cheers, Employee Activity Association Inc. (Dkt. 3).” Original at archive.org. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/court-filing-e-d-va-no-1-24-cv-00849-dkt-3-e-d-va-aa29b1a74a/, SHA-256 a15bcfb6013a31e3ec32d4210edd26e45abc8964025408ca624fd408c5776bdc.

Full text

Case 1:24-cv-00849-LMB-LRV Document 3 Filed 07/17/24 Page 1 of 5 PageID# 11

UNITED STATES DISTRICT COURT
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FOR THE EASTERN DISTRICT OF VIRGINIA
vW. I 72024
U,iT

United States of America ex rel.
The Tarbell Group, LLC,

Plaintiff

Cheers,
Employee Activity Association Inc., Case no. 1:24cv849
Glen Allen Community Center,
Lake Ridge Parks & Recreation Association FILED UNDER SEAL PURSUANT TO
Inc..
31 U.S.C. § 3730(b)(2)
The Metropolitan Business League,
Mid-Eastern Athletic Conference,
National Association of Telecommunications
Officers and Advisors,
Southampton Recreation Association, and
Virginia Rush Soccer Inc.,

Defendants

FIRST AMENDED COMPLAINT

Nature of the Case

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

under the False Claims Act, 31 U.S.C. §§ 3729-3733, to recover funds illegally obtained by the

defendants under federal COVID-19 relief laws.

Jurisdiction and Venue

2. The Court has jurisdiction of, 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 each defendant can be found, resides, transacts 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 3 Filed 07/17/24 Page 2 of 5 PageID# 12

Parties—Relator

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

organized under the laws of the Commonwealth of Virginia.

Parties—501(c)(4) Defendants

4.
Defendant Cheers is a Tax-Exempt 501(c)(4) Organization. On the loan

application(s) at issue herein, this defendant gave its address as 210 Giant Drive, Richmond, VA.
5. Defendant Employee Activity Association Inc. is a Tax-Exempt 501(c)(4)

Organization. On the loan application(s) at issue herein, this defendant gave its address as 1306

Vincent Place, McLean, VA.

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

Organization. On the loan application(s) at issue herein, this defendant gave its address as 10800

Brookley Road, Glen Allen, VA.

7. Defendant Lake Ridge Parks & Recreation Association Inc. is a Tax-Exempt

501(c)(4) Organization. On the loan application(s) at issue herein, this defendant gave its address

as 12350 Oakwood Drive, Lake Ridge, VA.

8. Defendant The Metropolitan Business League is a Tax-Exempt 501(c)(4)

Organization. On the loan application(s) at issue herein, this defendant gave its address as 707

East Main Street, Suite 1615, Richmond, VA.

9.
Defendant Mid-Eastern Athletic Conference is a Tax-Exempt 501(c)(4)

Organization. On the loan appiication(s) at issue herein, this defendant gave its address as 2730

Ellsmere Avenue, Norfolk, VA.

10. Defendant National Association of Telecommunications Officers and Advisors is

a Tax-Exempt 501(c)(4) Organization. On the loan application(s) at issue herein, this defendant

gave its address as 1800 Diagonal Road, Suite 495, Alexandria, VA.

2
Case 1:24-cv-00849-LMB-LRV Document 3 Filed 07/17/24 Page 3 of 5 PageID# 13

11. Defendant Southampton Recreation Association is a Tax-Exempt 501(c)(4)

Organization. On the loan application(s) at issue herein, this defendant gave its address as 3201

Cheliowe Road, Richmond, VA.

12. Defendant Virginia Rush Soccer Inc. is a Tax-Exempt 501(c)(4) Organization. On

the loan application(s) at issue herein, this defendant gave its address as 2044 Landstown Centre

Way, Virginia Beach, VA.

Background

13. 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 of

2020, 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 up to two loans, one in each of two tranches, each called a “draw,” i.e., first-draw and

second-draw PPP Loans.

14. As a condition of receiving PPP Loans and forgiveness thereof, each applicant

was required to certify its eligibility under the PPP Program.

15. The PPP Program always excluded Tax-Exempt 501(c)(4) Organizations from

eligibility.

16. Defendants each applied for and received PPP Loans for which they were legally

ineligible.

3
Case 1:24-cv-00849-LMB-LRV Document 3 Filed 07/17/24 Page 4 of 5 PageID# 14

PPP Loans

17. Defendants received approval for, and forgiveness of, their PPP Loans on the

dates and in the amounts shown on the table attached hereto, despite being legally ineligible for

the same.

Cause of Action
False Claims Act, 31 U.S.C. § 3729

18. Relator repeats and realleges each of the foregoing paragraphs.

19. Each defendant was ineligible to receive its PPP Loan(s) at the time it applied and

received approval for the same.

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

fraudulent claim for payment or approval, to the injury of the United States, by falsely certifying

that it was eligible for a PPP Loan and forgiveness thereof and thereby receiving the same.

21. 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 certifying that it was eligible for a PPP Loan and forgiveness thereof and thereby

receiving the same.

22. Each defendant did knowingly make, use, or cause to be made or used, a false

record or statement material to, or did knowingly conceal, or did knowingly and improperly

avoid or decrease, an obligation to pay or transmit money or property to the United States

government, by falsely certifying that it was eligible for a PPP Loan and forgiveness thereof and

thereby receiving the same.

Prayer for Relief

23. WHEREFORE, Relator prays for the following relief against each defendant:
a. A declaration that each defendant did violate the False Claims Act;

4
Case 1:24-cv-00849-LMB-LRV Document 3 Filed 07/17/24 Page 5 of 5 PageID# 15

b. An amount thrice the amount of PPP Loans and interest forgiven or

otherwise not repaid with respect to each defendant, lending fees paid by

SBA, foregone interest, and all other damages suffered by the United

States government, plus civil penalties and applicable interest, under 31

U.S.C.§ 3729(a)(1);

c. The cost of this civil action, apportioned to each defendant respectively in

proportion to its share of the aggregate damages recouped herein, under 31

U.S.C. § 3729(a)(3);

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 and further relief as may be just and proper.

Demand for Jury Trial

24. Relator demands a trial by jury.

Respectfully submitted,

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

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