Complaint — GNGH2 v. Hemisphere GNSS (D. Ariz.)

Summary

A sealed qui tam complaint under the False Claims Act in United States ex rel. GNGH2 Inc. v. Hemisphere GNSS (USA) Inc., Case 2:22-cv-00224-MTL, in the U.S. District Court for the District of Arizona, filed February 10, 2022 as Document 1. The relator alleges that the defendant, a Scottsdale, Arizona technology firm, falsely certified on Form 2483-SD on or about February 13, 2021 that it was not owned or directed from the People’s Republic of China when applying for second-round PPP funding. It alleges the defendant was a subsidiary of Beijing Unistrong Science & Technology Co. Ltd. and had a director resident in Mainland China. The complaint lists loans of $1,671,500 and $1,570,200 and seeks judgment of $4,710,600 under 31 U.S.C. Section 3729. It is filed by David Abrams, Attorney at Law, for the relator.

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Case 2:22-cv-00224-MTL Document1 Filed 02/10/22 Page1of5

David Abrams, Attorney at Law TO BE FILED UNDER Se
Admitted PHV ___. LODGED

PO Box 3353 Church Street Station ——RECEIVED ___ COPY

New York, New York 10008

Scottsdale, AZ 85255

Defendant.

Tel. 212-897-5821 dnabrams@gmail.com | FEB 1 0 2022
CLERK U 3 DISTRICT
United States District Court BREED SEA DON, RT
District of Arizona BY an DEPUTY
)
United States of America ex rel. )
GNGH2 Inc., )
Relator's Address: )
305 Broadway Suite 601 ) SE ALED
New York, NY 10007 )
)
Plaintiff-Relator, )
)
- against - ) Index No; €V22-00224-PHX-MTL
)
HEMISPHERE GNSS (USA) Inc. ) Complaint
Defendant's Address: )
8515 E Anderson Drive )
)
)
)
)

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 are owned or directed by companies out of the Peoples'

Republic of China, also known as Mainland China.

[continued on next page]
Case 2:22-cv-00224-MTL Document1 Filed 02/10/22 Page 2 of5

Il. Parties

2. Defendant HEMISPHERE GNSS (USA) Inc. ("Defendant") is a Delaware business

corporation with its principle place of business in Scottsdale, Arizona.
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3. The Relator, GNGH2 Inc. ("Relator" or "Plaintiff") is a New Jersey corporation with a

principle office in the State of New Jersey, County of Bergen.

Il Compliance with Requirements of Suit

4, This matter will be filed under seal pursuant to 31 U.S.C. Section 3730( ) 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 its head office in Scottsdale, Arizona.

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.
Case 2:22-cv-00224-MTL Document1 Filed 02/10/22 Page 3of5

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 directed or owned out of
the Peoples' Republic of China.

12. The Defendant in this matter is a technology firm. It received first and s cond round

disaster relief as follows:

Date Loan Number Amount Forgiven

4/28/2020 8519147200 $1,671,500 12/16/2020
|

2/13/2021 8264428401 $1,570,200 11/1/2021

13. Thus, on or about February 13, 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. Atall times relevant to this matter, the Defendant was a subsidiary of an entity known as

"Beijing Unistrong Science & Technology Co. Ltd." which is an entity that is based in the
Case 2:22-cv-00224-MTL Document1 Filed 02/10/22 Page/4 of 5

People’s Republic of China ("Mainland China"); organized under the laws of Mainland China;
and which has significant operations in Mainland China.

16. Additionally, at all times relevant to this matter, one of the directors of the Defendant was
Xinping Guo, B10 3rd Floor, 10 Jiuxianqiao Road, Chaoyang Dist., Beijing, Bej 100015,
[Mainland] China, i.e. an individual who is a resident of Mainland China.
17. Thus, Defendant made a fraudulent representation when it completed form 2483-SD.
18. Asaresult of these statements, the Defendant received substantial funds|to which it

would not otherwise have been entitled.

VI. (Count I) Violation of the False Claims Act

19. 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)

20. 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 C orp., 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.")

21. 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

22. On behalf of the government, Relator is seeking judgment for triple damages and civil

penalties set forth in 31 U.S.C. Section 3729.
Case 2:22-cv-00224-MTL Document1 Filed 02/10/22 Page 5 of 5
23. The Defendant received $1,570,200 in disaster relief as a result of the certifications set
forth above.
24. Accordingly, Relator seeks judgment in the amount of $4,710,600 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: New York, NY
February 8, 2022


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