Settlement Agreement — United States ex rel. Daniel Foster v. Akris, Inc.

Summary

Settlement Agreement among the United States acting through the Department of Justice on behalf of the SBA, Akris, Inc., and Relator Daniel Foster, in the qui tam action United States ex rel. Daniel Foster v. Akris, Inc., No. 25-cv-11989-BEM, in the U.S. District Court for the District of Massachusetts, dated 1/21/2026. In the recitals Akris admits that its SBA Form 2483-SD for a Second Draw PPP loan reported employing 64 people as of March 17, 2021, and that Akris and its affiliates employed more than 300 employees. Under the terms, Akris shall pay the United States $1,823,100, of which $1,180,000 is restitution, plus interest at 5% per annum from December 8, 2025. Conditioned upon receiving the Settlement Amount, the United States shall pay the Relator $182,310.00 plus interest, and Akris shall pay the Relator $7,929.28 for expenses, attorneys' fees and costs.

Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Cite this document

“Settlement Agreement — United States ex rel. Daniel Foster v. Akris, Inc.” Original at www.justice.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/court-filing-no-1-25-cv-11989-d-mass-420315c6bd/, SHA-256 90e8748cee63910431d3915fb1b81b8bec45751c1e89ad62c8e6105e044203fc.

Full text

SETTLEMENT AGREEMENT

This Settlement Agreement ("Agreement'') is entered into among the United

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

ofthe United States SmalJ Business Administration (collectively the "United States"),

Akris, Inc. ("Akris"), and Daniel Foster ("Relator") (hereafter collectively referred to as

"the Parties"), through thefr authorized representatives.

RECITALS

A. Aleris is the United States subsidiary of a Switzerland-based fashion

house, Akris AG. Akris is a Massachusetts corporation with a principal place of business

in New York.

B. On or about March 17, 2021, Akris applied for a Second Draw PPP loan

under the Paycheck Protection Program provisions ofthe Coronavirus Aid, Relief, and

Economic Security Act (the "Second Draw PPP Loan").

C. The United States Small Business Administration ("SBA") is an agency of

the United States government that provides aid, counsel, and assistance to small

businesses and entrepreneurs. The Coronavims Aid, Relief, and Economic Security Act,

Section 1102, vested the SBA with the responsibility ofmanaging the Paycheck

Protection Program ("PPP'') under the SBA's 7(a) Loan Program. The PPP was a federal

program that provided emergency reliefto small businesses affected by the Covid-19

pandemic. See 15 U.S.C. § 636(a)(36).

D. On July 14, 2025, Relator filed a qui tam action in the United States

District Court for the District of Massachusetts captioned United States ex rel. Daniel

Foster v. Akris, Inc. No. 25-cv-11989-BEM, pursuant to the qui tam provisions ofthe
False Claims Act, 31 U.S.C. § 3730(b) (the "Civil Action"). Following the Effective

Date of this Agreement, the United States will file a notice of intervention for purposes of

settlement.

E. The United States contends that it has certain civil claims against Akris for

submitting or causing the submission offalse claims to the SBA arising from Akris'

application for a PPP loan in 2021 during the so-called "Second Draw" period of the PPP

funding, and Alais' receipt of funds from and forgiveness for that loan,

F. To apply for a Second Draw loan, a business or entity had to certify that it

understood and met all the requirements of the PPP program, in(?luding the requirement

that the business or entity, together with its affiliates, did not employ more than 300

employees, or satisfied a "per-location" exception of employing no more than 300

employees at each location. See SBA Form 2483-SD (1/21).

G. Akris admits, acknowledges, and accepts responsibility for the following

facts:

1. On the first page of its SBA-Form 2483-SD, Akris identified that,

together with its affiliates, it employed 64 people as ofMarch 17, 2021.

2. On the second page, Akris answered "No" to the question as to

whether it "or any owner of [Akris] an owner of any other business, or have common

management (including a management agreement) with any other business?"

3. On the third page of its SBA-Form 2483-SD, Akris certified that it

was "eligible to receive a loan under the rules in effect at the time this application is

submitted" and that it, "together with its affiliates ... (2) employ[ed] no more than 300

employees."

2
4. Akris is the United States subsidiary of Switzerland-based Akris

AG. At the time of the application of the Second Draw PPP loan, Akris and its affiliates

employed more than 300 employes.

5. Accordingly, Akris incorrectly reported the number of its

employees, incorrectly certified that, together with its affiliates, it employed no more than

300 employees, and improperly certified its eligibility for the Second Draw PPP loan on

the SBA-Form 2483-SD.

6. Based on its incorrect submission and certification, Akris received

a Second Draw PPP loan on or around March 17, 2021.

7. Akris applied for loan forgiveness and, on or around November 19,

2021, SBA forgave the full value of Akris' Second Draw PPP loan, including interest.

H. The conduct in Paragraph G is hereafter referred to as the "Covered

Conduct."

I. The United States contends that Akris was ineligible for the Second Draw

PPP loan it received because Akris, together with its affiliate, Akris AG, employed more

than 300 employees but falsely certified to the SBA that they did not. Moreover, the

United States contends that Akris and its affiliates did not satisfy the "per-location"

exception because Akris employed well over 300 employees.

J. Akris received credit under the Department of Justice's guidelines for

cooperating in a False Claims Act case, Justice Manual § 4-4.112. Particularly, Akris

timely and proactively admitted and acknowledged the Covered Conduct, and timely and

proactively initiated settlement discussions with the United States.

3
K. Relator claims entitlement wider 31 U.S.C. § 3730(d) to a share of the

proceeds of this Settlement Agreement and to Relator's reasonable expenses, attorneys'

fees and costs.

In consideration of the mutual promises and obligations of this Agreement, the

Parties agree and covenant as follows:

TERMS AND CONDITIONS

1. Akris shall pay to the United States $1,823,100, of which $1,180,000 is

restitution, plus interest at a rate of 5% per annum from December 8, 2025 and

continuing through the date of payment ("Settlement Amount"), no later than ninety (90)

days after the Effective Date of this Agreement, by electronic funds transfer pursuant to

written instructions to be providei:l by the Office of the United States Attorney for the

District of Massachusetts.

2. Conditioned upon the United States receiving the Settlement Amount and

as soon as feasible after receipt, the United States shall pay $182,310.00 plus interest to

Relator by electronic funds transfer ("Relator's Share").

3. Within 30 days of the Effective Date of this Agreement, Akris shall pay to

Relator the sum of $7,929.28 for expenses and attorneys' fees and costs pursuant to 31

U.S.C. § 3730(d). With a reasonable time upon execution of this Agreement, Relator

shall provide wire instructions to Ak1is in order to effectuate this payment.

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

below, and upon the United States' receipt of the Settlement Amount plus interest due

under Paragraph 1, the United States releases Akris from any civil or administrative

monetary claim the United States has for the Covered Conduct under the False Claims

4
Act, 31 U.S.C. §§ 3729-3733; the Administrative False Claims Act (formerly known as

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.

5. Subject to the exceptions in Paragraph 6 below, and upon the United

States' receipt of the Settlement Amount, plus interest due under Paragraph 1, Relator,

for himself and for his heirs, successors, attorneys, agents. and assigns, releases Akris

from any civil monetary claim the Relator has on behalf ofthe United States for the

. Covered Conduct under the False Claims Act, 31 U.S.C. §§ 3729-3733, or any other

cause of action.

6. Notwithstanding the releases given in Paragraph 4 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 ~sing 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;

and

s
f.' Any liability of individuals.

7. 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,

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 ofthe proceeds of this Agreement and/or the Civil Action.

8. Relator, for himself, and for his heirs, successors, attorneys, agents, and

assigns, releases Akris, and its 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.

9. Akris waives and shall not assert any defenses Akris 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.

10, Akris fully and finally releases 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 Akris has asserted, could have

asserted, or may assert in the future against the United°States, its agencies, officers,

6
agents, employees, and servants, related to the Covered Conduct or the United States'

investigation or prosecution thereof.

11. Akris fully and finally releases the Relator from any and all claims related

to the Second Draw PPP Loan, including its forgiveness, Relator's investigation thereof,

and the Civil Action, whether civil, criminal, or otherwise from any claims (including

attorneys' fees, costs, and expenses of every kind and however denominated) that Akris

has 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.

12. 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 Akris, and its

present or former officers, directors, employees, shareholders, and agents in connection

with:

(1) the matters covered by this Agreement;

(2) the United States' audit(s) and civil investigation(s) of the matters

covered by this Agreement;

(3) Akris' investigation, defense, and corrective actions undertaken in

response to the United States' audit(s) and civil investigation(s) in connection

with the matters covered by this Agreement (including attorneys' fees);

(4) the negotiation and perfonnance ofthis Agreement;

7
(5) the payment makes to the United States pursuant to this Agreement

and any payments that Alcris 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 Akris, and Akris shall not charge such

Unallowable Costs directly or indirectly to any contract with the United States.

c. Treatment of Unallowable Costs Previously Submitted for

Payment: Within 90 days ofthe Effective Date of this Agreement, Akris shall identify

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

Costs included in payments previously sought by Akris or any of its subsidiaries or

affiliates from the United States. Akris agrees that the United States, at a minimum, shall

be entitled to recoup from Akris 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 Akris' books and records

and to disagree with any calculations submitted by Akris or any of its subsidiaries or

affiliates regarding any Unallowable Costs included in payments previously sought by

Akl'is, or the effect of any such Unallowable Costs on the amount of such payments.
13. This Agreement is intended to be for the benefit of the Parties only.

8
14. Upon receipt ofthe payment described in Paragraph 1, 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)(l).

15. Each Party shall bear its own legal and other costs incun-ed in connection

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

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

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

17. 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 District Court for the District of Massachusetts. 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.

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

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

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

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

below.

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

constitutes ap. original and all of which constitute one and the same Agreement.

21. This Agreement is binding on Akris' successors, transferees, heirs, and

assigns.

9
22. This Agreement is binding on Relator's successors, transferees, heirs, and

assigns.

23. All Parties acknowledge that the United States may disclose this

Agreement, and information about this Agreement, to the public.

24. 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.

THE UNITED STATES OF AMERICA
Digitally signed by STEVEN
SHAROBEM
Date: 2026.01.21 12:51 :06
DATED: 1/21/2026 BY:
-05'00'

STEVEN T. SHAROBEM
Assistant United States Attorney
District of Massachusetts

A.KRIS, INC.

BY:
BONNIE ABRAHAM
CEO USA, Akris, Inc.

HY:
MAHTAB SIDDIQUE
VP Finance & Operations, Akris, Inc.

;} / •J A• rJ
( bjt . ·
.r '

BY: L_/~.
CHARLES TAMULEVIZ \\·... )
Counsel for Akris, Inc. ',"-

10
DA'\IF.L FOS'ff..R- REI.ATOR

)
DXfED: BY:

;)Al I i ) BY: ~ ~L--
GREGG SHAPIRO
Counsel tix Daniel Foster

File and source

File: doj-settlement-agreement.pdf
Size: 448,807 bytes
SHA-256: 90e8748cee63910431d3915fb1b81b8bec45751c1e89ad62c8e6105e044203fc
Our copy: doj-settlement-agreement.pdf
Original: www.justice.gov