Exhibit A, Settlement Agreement — United States ex rel. DePouw v. DMR Transportation, LLC (Dkt. 22-1)

Summary

Exhibit A, a Settlement Agreement among the United States acting through the Department of Justice on behalf of the SBA, DMR Transportation, L.L.C., Semsi Salja, Anes Suhonjic and Relator Jared DePouw, filed 06/10/22 as ECF No. 22-1 in Case 1:21-cv-00548-JMB-SJB. The recitals state that DMR received a Second Draw PPP Loan of $290,855.00 and that the United States alleges false certifications to Horizon Bank. Under the terms, the DMR Parties shall repay the loan to Horizon Bank in the amount of $293,667.93 and pay the United States $94,428.00 in FCA Settlement Proceeds and $611,904.07 in FIRREA Settlement Proceeds. The United States shall pay the Relator $14,164.20 conditioned upon receiving the FCA Settlement Proceeds. The agreement states that it is not an admission of liability by the DMR Parties, except to the extent admitted in guilty pleas in related criminal cases.

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“Exhibit A, Settlement Agreement — United States ex rel. DePouw v. DMR Transportation, LLC (Dkt. 22-1).” Original at archive.org. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/court-filing-no-1-21-cv-00548-dkt-22-1-w-d-mich-80297000d9/, SHA-256 acf7216a5190025985b751bbfb1e2c66097b5d26e52cd8a8521fe89cf9ec17b6.

Full text

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EXHIBIT A
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SETTLEMENT AGREEMENT

This Settlement Agreement (the “Agreement”) is entered into among the United

States of America, acting through the United States Department of Justice and on behalf of

the United States Small Business Administration (“SBA”) (collectively, the “United

States”), DMR Transportation, L.L.C. (“DMR”), Semsi Salja (“Salja”), Anes Suhonjic

(“Suhonjic,” and together with Salja and DMR, the “DMR Parties”), and Jared DePouw

(Relator, and together with the United States and DMR, “the Parties”), through their

authorized representatives.

RECITALS

A. DMR is a trucking and transportation logistics company located at 5380

36th Street SE, Grand Rapids, MI 49512.

B. On or about February 15, 2021, DMR applied through Horizon Bank for an

SBA-guaranteed Second Draw Paycheck Protection Program (“PPP”) Loan in the amount

of $290,855.00. DMR’s application was approved and DMR received a Second Draw PPP

Loan in the amount of $290,855.00 (the “Second Draw PPP Loan”). On or about

September 6, 2021, DMR applied to Horizon Bank for complete forgiveness of the Second

Draw PPP Loan.

C. On June 25, 2021, Relator filed a qui tam action in the United States District

Court for the Western District of Michigan captioned, United States ex rel. DePouw v.

DMR Transportation, LLC, et al., No. 1:21-cv-548 (W.D. Mich.), pursuant to the qui tam

provisions of the False Claims Act (the “FCA”), 31 U.S.C. § 3730(b) (the “Civil Action”).

Relator alleges that the DMR Parties fraudulently obtained the DMR Second Draw PPP
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Loan by falsely certifying its eligibility for a Second Draw PPP Loan and submitting false

financial records in support of the Second Draw PPP Loan application.

D. The United States contends that it has certain civil claims, including claims

arising under the FCA and the Financial Institutions Reform, Recovery, and Enforcement

Act of 1989 (“FIRREA”), against the DMR Parties arising from false certifications and

false documents that DMR supplied to Horizon Bank between February 15, 2021 and

September 6, 2021 in connection with the DMR Second Draw PPP Loan. Specifically, the

United States alleges that:

a. In its Second Draw PPP Loan application, submitted to Horizon
Bank on or about February 15, 2021, DMR knowingly and falsely
certified that (1) the company realized a reduction in gross receipts
of at least 25% between Q2 2019 and Q2 2020; and (2) information
in DMR’s Second Draw PPP Loan Application, and information
provided in all supporting documents, was true and accurate in all
material respects.

DMR, however, did not realize a reduction of at least 25% in gross
receipts between Q2 2019 and Q2 2020. To disguise that fact—and
to conceal the fact that DMR was therefore ineligible for a Second
Draw PPP Loan—DMR fraudulently manipulated quarterly balance
sheets and other financial records that were signed by DMR’s
principals and supplied to Horizon Bank in connection with the
Second Draw PPP Loan.

b. In its Second Draw PPP Loan Forgiveness Application, submitted
to Horizon Bank on or about September 6, 2021, DMR knowingly
and falsely certified that the Second Draw Loan Proceeds were used
to pay eligible business costs when, in fact, DMR held and never
spent the loan proceeds. DMR also submitted documents in support
of the Forgiveness Application, including a “PPP Full Time
Equivalency Analysis,” to falsely make it appear as though DMR
spent the Second Draw PPP Loan proceeds on payroll.

The conduct described in this Paragraph D is referred to below as the “Covered Conduct.”

E. This Settlement Agreement is neither an admission of liability by the DMR

Parties, except to the extent admitted in any guilty pleas in related criminal cases against

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Salja and Suhonjic in the Western District of Michigan, nor is this Agreement a concession

by the United States that its claims are not well founded.

F. Relator claims entitlement under 31 U.S.C. § 3730(d) to a share of the FCA

Settlement Proceeds, as that term is defined in Paragraph 2, below, and to Relator’s

reasonable expenses, attorneys’ fees, and costs.

To avoid the delay, uncertainty, inconvenience, and expense of protracted litigation

of the above claims, and in consideration of the mutual promises and obligations of this

Settlement Agreement, the Parties agree and covenant as follows:

TERMS AND CONDITIONS

1. The DMR Parties shall repay the Second Draw PPP Loan to Horizon Bank,

plus interests and associated costs, in the amount of TWO HUNDRED NINETY-THREE

THOUSAND, SIX HUNDRED SIXTY-SEVEN DOLLARS AND NINETY-THREE

CENTS ($293,667.93) no later than fourteen (14) days after receiving wiring instructions

from Horizon Bank after the Effective Date of this Agreement.

2. The DMR Parties shall pay to the United States NINETY-FOUR

THOUSAND, FOUR HUNDRED TWENTY-EIGHT DOLLARS ($94,428.00) (the “FCA

Settlement Proceeds”), none of which is restitution, by electronic funds transfer pursuant

to wire instructions to be provided by the U.S. Attorney’s Office for the Western District

of Michigan no later than fourteen (14) days after the Effective Date of the Agreement.

3. The DMR Parties shall pay to the United States SIX HUNDRED ELEVEN

THOUSAND, NINE HUNDRED FOUR DOLLARS AND SEVEN CENTS

($611,904.07) (the “FIRREA Settlement Proceeds”), none of which is restitution, by

electronic funds transfer pursuant to wire instructions to be provided by the U.S. Attorney’s

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Office for the Western District of Michigan no later than fourteen (14) days after the

Effective Date of the Agreement.

4. Conditioned upon the United States receiving the FCA Settlement Proceeds,

and as soon as feasible after receipt, the United States shall pay $14,164.20 to Relator by

electronic funds transfer (the “Relator’s Share”).

5. Relator claims entitlement to reasonable expenses, attorney’s fees, and costs

pursuant to 31 U.S.C. § 3729(d)(1) against the DMR Parties. If the DMR Parties and

Relator are unable to reach agreement on reasonable expenses, attorney’s fees, and costs

absent Court intervention, Relator will submit a fee petition to the United States District

Court for the Western District of Michigan seeking payment of such reasonable expenses,

attorney’s fees, and costs against the DMR Parties.

6. Subject to the exceptions in Paragraph 8 (concerning reserved claims),

below, and upon the United States’ receipt of the FCA and FIRREA Settlement Proceeds,

the United States releases the DMR Parties from any civil or administrative monetary claim

the United States has for the Covered Conduct under the False Claims Act, 31 U.S.C.

§§ 3729–3733, the Financial Institutions Reform, Recovery, and Enforcement Act of 1989,

12 U.S.C. § 1833a, the Program Fraud Civil Remedies Act, 31 U.S.C. §§ 3801-3812, or

the common law theories of breach of contract, payment by mistake, unjust enrichment,

and fraud.

7. Subject to the exceptions in Paragraph 8 below, and upon the United States’

receipt of the FCA Settlement Proceeds, Relator, for himself and for his heirs, successors,

attorneys, agents, and assigns, releases the DMR Parties from any civil monetary claim the

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Relator has on behalf of the United States for the Covered Conduct under the False Claims

Act, 31 U.S.C. §§ 3729–3733.

8. Notwithstanding the releases given in Paragraph 6 of this Agreement, or

any other term of this Agreement, the following claims and rights of the United States are

specifically reserved and are not released:

a. Any liability arising under Title 26, U.S. Code (Internal
Revenue Code);

b. Any criminal liability;

c. Except as explicitly stated in the Agreement, any
administrative liability or enforcement right, or any
administrative remedy, including the suspension and
debarment rights of any federal agency;

d. Any liability to the United States (or its agencies) for any
conduct other than the Covered Conduct;

e. Any liability based upon obligations created by this
Agreement;

f. Any liability of individuals, other than Salja and Suhonjic;

g. Any liability for express or implied warranty claims or other
claims for defective or deficient products or services,
including quality of goods and services;

h. Any liability for failure to deliver goods or services due; and

i. Any liability for personal injury or property damage or for
other consequential damages arising from the Covered
Conduct.

9. Relator and his heirs, successors, attorneys, agents, and assigns shall not

object to this Agreement but agree and confirm that this Agreement is fair, adequate, and

reasonable under all the circumstances, pursuant to 31 U.S.C. § 3730(c)(2)(B).

Conditioned upon Relator’s receipt of the Relator’s Share, Relator and his heirs,

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successors, attorneys, agents, and assigns fully and finally release, waive, and forever

discharge the United States, its agencies, officers, agents, employees, and servants, from

any claims arising from the filing of the Civil Action or under 31 U.S.C. § 3730, and from

any claims to a share of the proceeds of this Agreement and/or the Civil Action.

10. Conditioned upon Relator’s receipt of attorney’s fees and costs identified in

Paragraph 5, above, Relator, for himself, and for his heirs, successors, attorneys, agents,

and assigns, releases the DMR Parties and their officers, agents, and employees from any

liability to Relator arising from the filing of the Civil Action, or under 31 U.S.C. § 3730(d)

for expenses or attorneys’ fees and costs.

11. The DMR Parties waive and shall not assert any defenses the DMR Parties

may have to any criminal prosecution or administrative action relating to the Covered

Conduct that may be based in whole or in part on a contention that, under the Double

Jeopardy Clause in the Fifth Amendment of the Constitution, or under the Excessive Fines

Clause in the Eighth Amendment of the Constitution, this Agreement bars a remedy sought

in such criminal prosecution or administrative action.

12. The DMR Parties fully and finally release the United States, its agencies,

officers, agents, employees, and servants, from any claims (including attorneys’ fees, costs,

and expenses of every kind and however denominated) that the DMR Parties have asserted,

could have asserted, or may assert in the future against the United States, its agencies,

officers, agents, employees, and servants, related to the Covered Conduct or the United

States’ investigation or prosecution thereof.

13. The DMR Parties fully and finally release the Relator from any claims

(including attorneys’ fees, costs, and expenses of every kind and however denominated)

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that the DMR Parties have asserted, could have asserted, or may assert in the future against

the Relator, related to the Covered Conduct and the Relator’s investigation and prosecution

thereof.

14. a. Unallowable Costs Defined: All costs (as defined in the Federal

Acquisition Regulation, 48 C.F.R. § 31.205-47) incurred by or on behalf of the DMR

Parties, and their present or former officers, directors, employees, shareholders, and agents

in connection with:

(1) the matters covered by this Agreement and any
related plea agreements;

(2) the United States’ audits and civil and criminal
investigations of the matters covered by this
Agreement;

(3) the DMR Parties’ investigation, defense, and
corrective actions undertaken in response to the
United States’ audits and civil and criminal
investigations in connection with the matters covered
by this Agreement (including attorneys’ fees);

(4) the negotiation and performance of this Agreement
and any related plea agreements; and

(5) the payments the DMR Parties make to the United
States pursuant to this Agreement and any payments
that the DMR Parties may make to Relator, including
costs and attorneys’ fees,

are unallowable costs for government contracting purposes (hereinafter referred to as

“Unallowable Costs”).

b. Future Treatment of Unallowable Costs: Unallowable Costs will be

separately determined and accounted for by the DMR Parties, and the DMR Parties shall

not charge such Unallowable Costs directly or indirectly to any contract with the United

States.

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c. Treatment of Unallowable Costs Previously Submitted for Payment:

Within 90 days of the Effective Date of this Agreement, the DMR Parties shall identify

and repay by adjustment to future claims for payment or otherwise any Unallowable Costs

included in payments previously sought by the DMR Parties or any of their subsidiaries or

affiliates from the United States. The DMR Parties agree that the United States, at a

minimum, shall be entitled to recoup from the DMR Parties any overpayment plus

applicable interest and penalties as a result of the inclusion of such Unallowable Costs on

previously-submitted requests for payment. The United States, including the Department

of Justice and/or the affected agencies, reserves its rights to audit, examine, or re-examine

the DMR Parties’ books and records and to disagree with any calculations submitted by

the DMR Parties or any of their subsidiaries or affiliates regarding any Unallowable Costs

included in payments previously sought by the DMR Parties, or the effect of any such

Unallowable Costs on the amount of such payments.

15. This Agreement is intended to be for the benefit of the Parties only.

16. Upon receipt of the FCA Settlement Proceeds described in Paragraph 2,

above, the Parties shall promptly sign and file in the Civil Action a Joint Stipulation of

Dismissal of the Civil Action pursuant to Rule 41(a)(1).

17. Each Party shall bear its own legal and other costs incurred in connection

with this matter, including the preparation and performance of this Agreement.

18. Each Party and signatory to this Agreement represents that it freely and

voluntarily enters in to this Agreement without any degree of duress or compulsion.

19. This Agreement is governed by the laws of the United States. The exclusive

jurisdiction and venue for any dispute relating to this Agreement is the United States

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District Court for the Western District of Michigan. For purposes of construing this

Agreement, this Agreement shall be deemed to have been drafted by all Parties to this

Agreement and shall not, therefore, be construed against any Party for that reason in any

subsequent dispute.

20. This Agreement constitutes the complete agreement between the Parties.

This Agreement may not be amended except by written consent of the Parties.

21. The undersigned counsel represent and warrant that they are fully

authorized to execute this Agreement on behalf of the persons and entities indicated below.

22. This Agreement may be executed in counterparts, each of which constitutes

an original and all of which constitute one and the same Agreement.

23. This Agreement is binding on the DMR Parties’ successors, transferees,

heirs, and assigns.

24. This Agreement is binding on Relator’s successors, transferees, heirs, and

assigns.

25. All parties consent to the United States’ disclosure of this Agreement, and

information about this Agreement, to the public.

26. This Agreement is effective on the date of signature of the last signatory to

the Agreement (Effective Date of this Agreement). Facsimiles of signatures shall

constitute acceptable, binding signatures for purposes of this Agreement.

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5/16/2022
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