Complaint — GNGH2 v. Relyon Nutec USA LLC (D. Mass.)

Summary

A qui tam Complaint Under the False Claims Act in United States of America ex rel. GNGH2 Inc. v. Relyon Nutec USA LLC, Case 1:24-cv-11291-AK, in the United States District Court for the District of Massachusetts, filed under seal May 15, 2024 by relator's counsel David Abrams. Relator GNGH2 Inc. alleges that the defendant, part of a firm providing safety training services to the maritime industry, received a second draw PPP loan of $1,279,707.50 after certifying on Form 2483-SD that, including affiliates, it had no more than 300 employees. It alleges that the defendant was an affiliate of a larger concern with far more than 300 employees, making the certification false under 31 U.S.C. Section 3729(a)(1)(B). The relator seeks judgment of $3,982,023.16 in favor of the United States.

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        Case 1:24-cv-11291-AK      Document 1      Filed 05/15/24   Page 1 of 6




David Abrams, Attorney at Law (Mass BBO 639250)
PO Box 3353 Church Street Station
New York, NY 10008
212-897-5821 dnabrams@gmail.com

United States District Court
District of Massachusetts
____________________________________
                                       )              TO BE FILED UNDER
United States of America ex rel.       )              SEAL
GNGH2 Inc.,                            )
                    Plaintiff-Relator, )
                                       )
             - against -               )              Case No.
                                       )
RELYON NUTEC 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

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 exceed

the applicable size standards.

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        Case 1:24-cv-11291-AK     Document 1     Filed 05/15/24   Page 2 of 6




II.   Parties

2.    Defendant RELYON NUTEC USA LLC ("Defendant") is a Louisiana

limited liability company. Defendant maintains a facility in Barnstable County,

Massachusetts.

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 maintains a

facility at 101 Academy Drive, Buzzards Bay, Massachusetts 02532.


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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 its

total size exceeds the legal maximum of 300.

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12.    The Defendant in this matter is part of a firm which provides safety training

services to the maritime industry. It received second draw PPP disaster relief as

follows:

Date                Amount              Loan #                      Forgiven

2/13/21             $1,279,707.50       8251428402                  11/4/2021

13.    Thus, on or about February 13, 2021, Defendant completed Form 2483-SD

which required it to certify that including its affiliates it did not have more than

300 employees.

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

15.    At all times relevant to this matter, the Defendant was an affiliate of a larger

concern which had far more than 300 employees.

16.    Moreover, the foregoing information is available on the websites of the

Defendant and/or its affiliates.

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.

19.    As a result of these statements, the Defendant received (and the United

States paid) substantial funds to which it would not otherwise have been entitled.




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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, fraudulent, 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 Defendant received $1,279,707.50 (and the United States paid) in

disaster relief as a result of the certifications set forth above.

25.       Additionally, the United States paid $38,391.22 in processing fees and

$9,242.33 in interest in respect of the loan.




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         Case 1:24-cv-11291-AK     Document 1    Filed 05/15/24   Page 6 of 6




26.   Accordingly, Relator seeks judgment in the amount of $3,982,023.16

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
                                  (Mass BBO 639250)
                                   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, NY
             May 15, 2024




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