Complaint — Riner v. Rancho Santa Fe Association (S.D. Cal.)
Summary
The original qui tam complaint of relator Wade Riner in United States ex rel. Wade Riner v. Rancho Santa Fe Association, et al., Case 3:22-cv-01285-GPC-KSC, in the U.S. District Court for the Southern District of California, filed August 30, 2022 as Document 1 under seal and ordered unsealed on June 4, 2024. Brought under the False Claims Act, 31 U.S.C. §§ 3729-32, it alleges that California homeowners associations, condominium associations and country clubs falsely certified that they were eligible for PPP loans. Named defendants include Rancho Santa Fe Association, Bighorn Golf Club, Canyon Lake Property Owners Association, Shady Canyon Golf Club, Inc. and Sun City Lincoln Hills Community Association. The complaint pleads counts under 31 U.S.C. § 3729(a)(1)(A) and 31 U.S.C. § 3729(a)(1)(B) and demands a jury trial.
Summary drafted by a model from the text of the original file linked on this page 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
“Complaint — Riner v. Rancho Santa Fe Association (S.D. Cal.).”
Original at archive.org. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/court-filing-no-3-22-cv-01285-dkt-1-s-d-cal-d23f1a4c5a/
, SHA-256 3d92f9fb337c209eb3bd372a90f82424e16cac787899d15997f0f270ad59eb24.Full text
Case 3:22-cv-01285-GPC-KSC Document 1 Filed 08/30/22 PageID.136 Page 1 of
43
IN THE UNITED STATES DISTR1CT COURT
FOR THE SOUTHERN DISTRICT OF CALIFORNIA
22cv1285-GPC-KSC
UNITED STATES OF AMERICA § CIVIL N O . - - - ~ -
ex. rel. WADE RINER §
§
co
§
Plaintiff, RELATOR \VADE
§
§ RlNER'S ORIGINAL
§ COMPLAINT
§
v. §
§ ______________________________
FILED UNDER SEAL
§
§ PURSUANT TO 31 U.S.C.
§ §3730 (b)(2)
RANCHO SANTA FE s/ J. Olsen
§ ORDERED UNSEALED on 6/4/24
ASSOCIATION, ET AL. §
§ JURY TRIAL DEMANDED
Defendants. §
§
RELATOR WADE RINER'S ORIGINAL COMPLAINT
Case 3:22-cv-01285-GPC-KSC Document 1 Filed 08/30/22 PageID.137 Page 2 of
43
TABLE OF CONTENTS
Page
I. INTRODUCTION: COVID-19, PPP, AND THE OPPORTUNISTS ........................... , .......... 2
IL PARTIES .......................................................................................................... : .......... 4
III. RESPONEAT SUPERIOR AND VICARIOUS LIABILITY .................................................. 8
IV. JURISDICTION AND VENUE ............................................................................. : .......... 8
V. ORIGINAL SOURCE AND DISCLOSURES .......................................................... , .......... 9
VI. THE PAYCHECK PROTECTION PROGRAM .................................................................. 9
VII. DEFENDANTS' FRAUD ............................................................................................. 16
VIII. ACTIONABLE CONDUCT BY DEFENDANTS .............................................................. 31
A. FALSE CLAIMS ACT·········· .. ········· ....................................................... '. ........ 31
B. DEFENDANTS' VIOLATIONS OF THE FALSE CLAIMS ACT ............................ 33
i. PRESENTATIONOFFALSEORFRAUDULENTCLAIMS (31 U.S.C.
§ 3729(a)(l)(A)) .......................................................................................... 33
ii. MAKING OR USING-OR CAUSING TO BE MADE OR USED-
FALSE RECORDS OR STATEMENTS MATERIAL TO FALSE OR
FRAUDULENT CLAIMS (31 U.S.C. § 3729(a)(l)(B)) .................................... 33
C. DEFENDANTS' VIOLATIONS OF THE FALSE CLAIMS ACT ARE
MATERIAL .................................................................................................... 34
IX. CAUSES OF ACTION ................................................................................................. 36
A. COUNT I- PRESENTATION OFFALSE OR FRAUDULENT CLAIMS
(31 U.S.C. § 3729(a)(l)(A)) .................................................................... 36
B. COUNTil-MAKINGORUSINGFALSESTATEMENTSMATERIAL
TO FALSE OR FRAUDULENT CLAIMS (31 U.S.C. ,
§ 3729(a)(l)(B)) .................................................................................:, ........ 37
X. PRAYER FOR RELIEF ................................................................................................ 39
XI. DEMAND FOR JURY TRIAL ...................................................................................... 40
I
Case 3:22-cv-01285-GPC-KSC Document 1 Filed 08/30/22 PageID.138 Page 3 of
43
Plaintiff/Relator Wade Riner ("Relator" or "Riner") brings this action pursuant to the False
Claims Act (FCA), 31 U.S.C. §§ 3729-32, and seeks to recover all damages, penalties, and other
remedies established by the FCA on behalf of the United States of America and on his ov,,n behalf.
Relator respectfully shows the following:
I. INTRODUCTION: Covrn-19, PPP, AND THE OPPORTUNISTS
1. After the crisis of the COVID-19 Coronavirus pandemic began, Congre}s passed
the Coronavirus Aid, Relief, and Economic Security Act-more commonly referred to as the
"CARES Act"-in part to provide emergency relief to small businesses facing payroll difficulties
and other concerns meeting their bottom-line in the midst of the pandemic. Unfortunately, this aid
also attracted opportunistic actors who received aid that Congress never intended. Congress
created the PPP in March 2020, as part of the Coronavirus Aid, Relief and Economic Security
(CARES) Act, to provide emergency financial support to the millions of Americans suffering the
economic effects caused by the COVID-19 pandemic. The CARES Act authorized billions of
dollars in forgivable loans to small businesses struggling to pay employees and other business
expenses. Throughout 2020 and 2021, PPP loan applicants were required to certify that they were
eligible to receive a PPP loan.
2. Part of the aid in the CARES Act was the Paycheck Protection Program ("PPP"),
which provides forgivable, emergency loans to small businesses that certify to the United States
Small Business Administration that they are qualified to receive the interest-free loan, fuat their
loan request is necessary for continued operation, and that they will use funds only to pay payroll
!
expenses, rent, mortgage, interest, or utilities during a covered period.
2
Case 3:22-cv-01285-GPC-KSC Document 1 Filed 08/30/22 PageID.139 Page 4 of
43
3. The PPP loans were originally intended to help traditional small busines.ses make
it through the economic downturn that came as a consequence of the pandemic, but others wanted
in.
4. Numerous trade groups and similar associations lobbied Congress to be added as
entities eligible for PPP loans. Among those groups were country clubs and co;.nmunity
associations, which include housing cooperatives, condominium associations, and propeity owner
associations.
5. In December 2020, Congress passed and the president signed into law amendments
to the CARES Act (the Economic Aid Act) that allowed housing cooperatives to apply for PPP
loans. Condominium associations, homeowners associations, and other community ass:ociations
were not included in the amendments, and neither were other not-for-profit organizat,ions like
country clubs. The list of eligible recipients only expanded one more time near the end QJ: the final
PPP application period-when President Biden signed the American Rescue Plan Act of2021 into
law on March 11, 2021, which included most 50l(c) organizations as "additional covered nonprofit
entities" but explicitly excluded 50l(c)(4) organizations (the only 50l(c) status for which a
homeowners association or condominium association might be eligible).
6. Despite the industry's recognition that Congress had not allowed their participation
in the Paycheck Protection Program, numerous community associations, particularly
condominium associations, homeowners associations, and other not-for-profit organizations,
applied for PPP loans anyway, falsely certifying to the United States that they were eligible for
funding and that they needed the loans after also certifying in the Application that "I hav~, read the
statements included in this form, including the Statements Required by Law and Executive Orders,
and I understand them." They did so even though they had millions of dollars in revenue every
3
Case 3:22-cv-01285-GPC-KSC Document 1 Filed 08/30/22 PageID.140 Page 5 of
43
year that was not reliant on the unpredictable swings of the economy but instead on a simple tool:
assessments to their wealthy membership. Many country clubs nationwide acted similarly. Rather
than obtain PPP loans as the intended American businesses in need, Defendants approached the
program as opportunists. And by fraudulently applying for these PPP loans, the rich got richer
while depriving needy Americans of the boost that Congress sought to give them.
7. In total, the Defendant not-for-profit condominium associations and not-:for-profit
·;
homeowners associations fraudulently applying for PPP loans received millions of dollars in
forgivable funding, directly depriving the United States of millions of dollars and preventing
worthy and needy small businesses from receiving congressionally approved loans.
8. Not-for-profit community associations were not the only culprits. Not-::or-profit
so-called "country clubs" were not eligible and also wrongly applied for and received PPP.
9. As Acting Assistant Attorney General Brian M. Boynton has explained, "PPP loans
were intended to provide critical relief to small businesses so that they could pay employees and
maintain operations," and the Department of Justice is "committed to pursuing those who
knowingly violated the requirements of the PPP or other Covid-19 assistance programs and
obtained relief funds to which they were not entitled"-particularly, with the assistance 9f qui tam
relators.
II. PARTIES
10. Plaintiffi'Relator Wade Riner is a regular homeowner and investor. A CO'.})Oration
with which Riner is the officer and principle in tum owns multiple homes in Florida. Through
1
ownership of these homes, Riner is a member of the Hunters Run Property Owners Association,
Inc., and he was a member of the Boca West Master Association, Inc. until the• fourth quarter of
2021. Through his membership in these homeowners associations in Florida, he learned that his
4
Case 3:22-cv-01285-GPC-KSC Document 1 Filed 08/30/22 PageID.141 Page 6 of
43
homeowners associations had applied for millions of dollars of federal relief through PPP loans,
even though they were not a business interest that qualified for such loans under the CARES Act.
Riner subsequently learned that his own homeowners associations and numerous others defrauded
the United States government by falsely certifying they were eligible for PPP loans that tb.ey were
not, in fact, eligible for. Riner is intimately familiar with the finances and organizatio~ of these
particular homeowners associations as well as homeowners associations in general, including
details of how such community associations are governed and how they raise funds through their
membership and other sources of liquidity.
1 I. Defendants are all various not-for-profit entities. Although there may be some
subtle differences in the Defendants' governing documents, Defendants can generally be
categorized in one of three ways: as a not-for-profit homeowners association, a not-for-profit
'
condominium association, or a not-for-profit country club.
12. Rancho Santa Fe Association ("Rancho Santa Fe") is a homeowners association
located at P.O. Box A, Rancho Santa Fe, CA.
13. Beverly Hills Tennis Club, Inc. ("Beverly Hills Tennis") is a non-protil: country
club located at 340 N. Maple Dr., Beverly Hills, CA.
14. Bighorn Golf Club ("Bighorn Golf') is a non-profit club located at 255 Palowet
Drive, Palm Desert, CA.
15. Bighorn Homeowners Association, Inc. ("Bighorn HOA") is a community
association located at 255 Palowet Drive, Palm Desert, CA.
16. Bodega Harbour Homeowners Association ("Bodega Harbour") is a homeowners
association located at P.O. Box 368, Bodega Bay, CA.
5
Case 3:22-cv-01285-GPC-KSC Document 1 Filed 08/30/22 PageID.142 Page 7 of
43
17. Canyon Lake Property Owners Association ("Canyon Lake") is a non-profit
community association located at 31512 Railroad Canyon Rd, Canyon Lake, CA.
18. Club Donatello Owners Association ("Club Donatello") is a non-profit community
association located at 501 Post St. FI 3, San Francisco, CA.
19. Crown Towers Homeowners Association ("Crown Towers") is a condominium
association located at 10701 Wilshire Blvd, Los Angeles, CA.
20. Four Seasons Homeowners Association ("Four Seasons") is a condominium
association located at 300 N Swan Dr, Beverly Hills, CA.
21. Glendora Country Club ("Glendora Club") is a non-profit club located at 2400
Country Club Dr, Glendora, CA.
22. Heritage Palms Homeowners Association ("Heritage Palms") is a non-profit
community association located at 44291 Heritage Palms Dr S, Indio, CA.
23. Heritage Ranch Owners Association ("Heritage Ranch") is a non-profit community
association located at 2130 Heritage Loop Rd, Paso Robles, CA.
24. Hidden Vailey Lake Association ("Hidden VaIIey Lake") is a hon:1eowners
association located at 18174 Hidden Valley Rd, Hidden Vailey Lake, CA.
25. Lake of the Pines Association ("Lake of the Pine") is a homeowners association
located at 11665 Lakeshore North, Auburn, CA.
26. Monte Vista Grove Homes ("Monte Vista Grove") is a non-profit homeowners
association located at 2889 San Pasqual St., Pasadena, CA.
27. North Coast Village Condominium Association ("North Coast Village") is a non-
profit condominium association located at 999 N. Pacific Street, Oceanside, CA.
6
Case 3:22-cv-01285-GPC-KSC Document 1 Filed 08/30/22 PageID.143 Page 8 of
43
28. The Palms Golf Club, Inc. ("The Palms") is a non-profit country club located at
57000 Palms Dr., La Quinta, CA.
29. PGA West Residential Association, Inc. ("PGA West") is a non-profit homeowners
association located at 54-320 Southern Hills, La Quina, CA.
30. Pine Mountain Lake Association ("Pine Mountain Lake") is a property owners
association located at 19228 Pine Mountain Dr, Groveland, CA.
31. Regency Wilshire Homeowners' Association ("Regency Wilshire") is a
condominium association located at 10551 Wilshire Blvd, Los Angeles, CA.
32. San Diego Country Estates Association ("San Diego Country Estates") is a non-
profit homeowners association located at 24157 San Vencente Rd., Ramona, CA.
33. The Santaluz Club, Inc. ("Santaluz Club") is a non-profit club located at 8170
Caminito Santaluz, San Diego, CA.
34. The Sea Ranch Association ("Sea Ranch") is a non-profit club located at 975
Annapolis Rd, The Sea Ranch, CA.
35. Seven Lakes Home Owners Association, Inc. ("Seven Lakes") is a co,nmunity
association located at 1 Desert Lakes Dr, Palm Springs, CA.
36. Shady Canyon Golf Club, Inc. ("Shady Canyon") is a non-profit country club
located at 100 Shady Canyon Dr., Irvine, CA.
37. Sierra Towers Condominium Association, Inc. ("Sierra Towers") is a condominium
association located at 9255 Doheny Rd, West Hollywood, CA.
38. Smith Ranch Homes Homeowners' Association ("Smith Ranch Homes") is a non-
profit homeowners association located at 500 Deer Valley Rd., San Rafael, CA.
7
Case 3:22-cv-01285-GPC-KSC Document 1 Filed 08/30/22 PageID.144 Page 9 of
43
39. Sun City Lincoln Hills Community Association ("Sun City") is a horr,eowners
association located at 965 Orchard Creek Ln, Lincoln, CA.
40. Valley-Hi Country Club ("Valley-Hi") is a non-profit club located at 9595 Franklin
Blvd, Elk Grove, CA.
41. The Villages Golf and Country Club ("The Villages") is a non-profit club located
at 5 000 Cribari Ln, San Jose, CA.
42. Wilshire-Holmby Homeowners Association Inc. ("Wilshire-Holmb)"') is a
condominium association located at 10433 Wilshire Blvd, Los Angeles, CA.
43. The Wilshire-Westholme Homeowners Association, Inc. ("Wilshire-Westholme")
is a condominium association located at 10590 Wilshire Blvd, Los Angeles, CA.
44. Woodhaven Country Club Homeowners Association ("Woodhaven Club HOA") is
a non-profit club located at 41555 Woodhaven Dr, Palm Desert, CA.
45. Yosemite Lakes Owners' Association ("Yosemite Lakes") is a homeowners
association located at 30250 Yosemite Springs Pkwy, Coarsegold, CA.
ill. RESPONEAT SUPERIOR AND VICARIOUS LIABILITY
46. Any and all acts alleged herein to have been committed by Defenda.nts were
committed by officers, directors, employees, representatives, or agents who at all times: acted on
behalf of the named Defendants and within the course and scope of their employment or agency.
IV. JURISDICTION AND VENUE
4 7. Jurisdiction and venue are proper in the Southern District of California, pnsuant to .
the False Claims Act {31 U.S.C. §§ 3729-33), because Relator's claims seek remedies \>n behalf
of the United States for multiple violations of3 l U.S.C. §§ 3729-30, and many of the Defendants
8
Case 3:22-cv-01285-GPC-KSC Document 1 Filed 08/30/22 PageID.145 Page 10
of 43
can be found in this district. Because Defendants can be found in this state, personal ju;:isdiction
is also proper.
V. ORIGINAL SOURCE AND DISCLOSURES
48. There are no bars to recovery under 31 U.S.C. § 3730(e). To the extent that any
allegations or transactions herein have been publicly disclosed, Relater has knowledfe that is
independent of and materially adds to any publicly disclosed allegations or transactions and had
provided that information to the United States prior to filing the complaint by serving a voluntary
Pre-Filing Disclosure Statement.
49. As required by 31 U.S.C. §§ 3730(b) and (e), Relator submitted and Original
Disclosure Statement to the Attorney General of the United States and the United States Attorney
for the Southern District of California, as well as all material evidence and information, prior to
filing and serving the Original Complaint.
VI. THE PAYCHECK PROTECTION PROGRAM
50. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the
"CARES Act"), Pub. L. 116-136, 134 Stat. 281, created the PPP, initially making $349 Jillian in
forgivable loans available to small businesses impacted by the COVID-19 pandemic. The U.S.
Small Business Administration ("SBA") administers the PPP, promulgates the rules and
regulations governing the PPP, and guarantees all PPP loans made by lenders.
51. The PPP allowed small businesses (less than 500 employees) to obtain forgivable
loans of up to $ 10 million, at 1% interest, to cover payroll costs, rent, mortgage interest, utilities,
and other overhead expenses for a "covered period." CARES Act § 1102(a)(2)(36)(D}'-(E), 134
Stat. at 288-90.
9
Case 3:22-cv-01285-GPC-KSC Document 1 Filed 08/30/22 PageID.146 Page 11
of 43
52. PPP loans were processed and approved by qualified lenders that 1he SBA
approves. Lenders issued PPP loans without the SBA's prior review or express and indiv,idualized
approval, but they agreed to be responsible for determining borrower eligibility under the SBA's
criteria. They were "deemed to have been delegated authority by the [SBA] Administrator to make
and approve covered loans." CARES Act § 1102(a)(2)(36)(F)(ii), 134 Stat. at 290.
53. For processing the PPP loans, the SBA reimbursed participating lenders with a
processing fee equal to the amount of 5% ofloans up to $350,000; 3% ofloans between $350,000
and $2,000,000; and 1% on loans of at least $2,000,000. See CARES Act§ l 102(a)(2)(36)(P), 134
Stat. at 293. Additionally, although the lenders funded the PPP loans with their own funds, the
SBA 100% guaranteed these loans.
54. PPP loans are also subject to complete forgiveness. CARES Act§ 1106, '134 Stat.
at 297-302. And within 90 days of which forgiveness is given, the SBA remits to the lender the
full amount of forgiveness, plus any accrued interest. Id. § l 106(c)(3), 134 Stat. at 298 ..
55. The PPP was a program under the Small Business Act, Section 7(a). Generally
speaking, a key eligibility requirement for Section 7(a) SBA loans is that the applicant be a
business operating for profit.
56. Pursuant to the CARES Act,. PPP loans were originally available only to a ''business
concern, nonprofit organization, veterans organization,[] Tribal business," or sole proprietorship
that employed no more than 500 employees. See CARES Act § 1102(a)(2)(36)(D), 134 Stat. at
288. Nonprofit-organization eligibility, however, was limited to 50l(c)(3) organizatiorn; that are
tax exempt. Id. § l 102(a)(2)(36)(A)(viii).
57. Eligibility for PPP is also spelled out in Interim Final Rule # 1 published in the
Federal Register on April 15, 2020 (answering the question, "How do I determine if I am
10
Case 3:22-cv-01285-GPC-KSC Document 1 Filed 08/30/22 PageID.147 Page 12
of 43
ineligible?"). As it stated: "Businesses that are not eligible for PPP loans are identified in 13 CFR
120.110 and described further in SBA's Standard Operating Procedure (SOP) 50 10 Subpart B,
Chapter 2, except that nonprofit organizations authorized under the Act are eligible." 85 Fed. Reg.
20812. Meanwhile, 13 CFR 120.110 states that "non-profit businesses" are ineligible.
58. Applicants for PPP loans were required to certify to a participating SBA-hpproved
lender and to the SBA that they are eligible to receive the loan under the rules in effect at the time
of their application. This certification came right after a certification that the applicants "read the
statements included in this form" and "understand them." For example, the April 2020 SBA Form
2483 (the PPP application at the time) required applicants to certify as follows:
Paycheck Pmtectiou Prngrnm
Borrower Application F-orm
CERTIFICATIONS AND AUTHORIZA1IONS
I certiiy 11mt:
• Ihavereadthestatem.entsincluded.inthis~ ·
•
• The .Ajlplicanl (1) is an indopelJdent ccntractm:, eligible self-employed irulividual, or <Ore proprietor ot (2) employs no morc
Ihm the ~of500 or employees or, ifapplic:abre, the sm:sl.Dda,d in numlJer of-loyees established by the SBA in 13
CF.R. 121.201 furtheApplicant'sindusby. ·
• I will comply, whene= >pplicable, with the civil righ15 and other limitatioos in flus funn.
• All SBA loan proaeds will be used only fur busiJJesffelared pwposcs ss sp,cilied in the loan applicmon and COl!Bist< nt wi!h the
Paycheck Protection l'rogtlllnRule.
• To1he-.t-h,, I willpun:base only American-made eqmpm,ntand products.
• The Applicanlisnoteagaged in any actiwy !hat is illeJl;,l 1111&:rfude,a), . - m locallaw.
• Aey loan re<cived by the Applicant1111&:r Section 7(b)(2) of11le Slllallllusiness Act bctwecnJanua,y 31, 2020andApri13, 2020 was
fur a pmpose other Ihm paymgpayroll coslsand oth« allo-leuses !OOllS ond«tbe Paycl=l<Pro~Progr.unRule.
59. The PPP applications also required applicants to certify that the loan request is
necessary to support their ongoing operations. As SBA Form 2483 required:
CERTIFICATIONS
The authorized representative of the Applicant must certify in good faith to all of the below by initialing next to each one:
Ill The Applicant was in operation on Febmary 15, 2020 .and had employees for whom it paid salaries and payroll tax.es or paid independent
contractors, as reported an Form(s) 1099--MISC.
11
Case 3:22-cv-01285-GPC-KSC Document 1 Filed 08/30/22 PageID.148 Page 13
of 43
60. Recognizing that some applicants might be confused by this economic-uncertainty
certification, the SBA provided a "safe harbor" when it issued Interim Final Rule #4 (85 Fed. Reg.
23450 published April 28, 2020) stipulating that "any borrower that applied for a PPP loan and
repays the loan in full by May 7, 2020, will be deemed by SBA to have made the required
certification in good faith." Interim Final Rule #4 additionally noted that the SBA would give
additional guidance before May 14, 2020 concerning this certification, especially in helping PPP
borrowers evaluate whether they "may have misunderstood or misapplied the statutory standard."
As of May 13, 2020, SBA clarified in its Frequently Asked Questions section of Interim Final Rule
# 9, (85 Fed. Reg. 29845 published May 19, 2020) stating that "borrowers must make this
certification in good faith, taking into account their current business activity and their ability to
access other sources of liquidity sufficient to support their ongoing operations in a manner that is
not significantly detrimental to the business."
6 I. PPP applications additionally required applicants' authorized representatives to
specifically certify that all information provided on the application is true and accurate in all
material respects as well as to certify their understanding that a false statement made in order to
obtain a guaranteed loan from the SBA is punishable under the law. Again, from the April 2020
SBA Form 2483:
· urulerl8 land357ibyimprisonm,nt notmoR:11Jmfiveycus ora
fuieofup lo 250,000; uruler 15 5byimprisomneat ofootmorethan two}'Clll3 and/or afuieofootmorethan$:i,0OO; aml,if
submilh:d lo a federally insured illstltulioo, "'1de, 18 USC 1014 by imprisomneot of oot more 111m thirty J<'U' and/or a line of not
morethan $1,000,000.
62. Finally, when PPP loan recipients apply for forgiveness of their loan, they must
further certify, through their authorized representative, that they have "complied with all
12
Case 3:22-cv-01285-GPC-KSC Document 1 Filed 08/30/22 PageID.149 Page 14
of 43
requirements in the Paycheck Protection Program Rules," including the statute passed in the
CARES Act and the subsequent amendments. From SBA Form 3508S:
By Signing Below, You Make. the Following Renrmnta:tions and Certili-catioos op Behalf of the; Borrower:
The Authorized Rep.resentative-of the Borrower certifies to all of the below by initialing next to each one.
Ill (7)(a)(37).
Bocrower has complied with all requirements in the Paycheck Protection ProgmnRules (Sections 7(aX36).
The
arul 7A ofthe Business Act, the PPP interim final mies. and guid;mce issued by SBA
Small the date
thwogh
of this application). mclrnling the rules related to:
• eligible uses-of PPP 1mm proceeds;
• the 3IIIOUJlt of PPP loan proeeeds th,t must be used fm: payroll costs (including proprietor expeoses for
Bom,wers that applied fur loans using SBAFmms 2483-C or 2483-SD-C);
• the caicuiat.io.n. and dcnuneo:tatioa of the Boaowei-~srevenue.redoctiou (if applicable); and
• the cakulmon ofthe B<>m>wer's !!,quested Loan.Forgiveness Amount. .
Infocmation _,Jing these requm,mmfs may be found in the Form 3508S Instructions arul the PaJ,cl,ecl<Proh:ction
ProgramRules_ ·
63. The PPP was originally funded by Congress with $349 Billion, but the funds were
depleted on April 16, 2020--only weeks after the CARES Act passed. On April 24, 2020, the
President signed the Paycheck Protection Program and Health Care Enhancement Act, Pub. L.
116-139, 134 Stat. 620, whereby Congress allocated an additional $320 Billion in funding.
64. Congress further expanded the PPP at the end of the year in the Corsolidated
Appropriations Act, 2021, Pub. L. 116-260. The Consolidated Appropriations Act, 2021, added
$284.5 Billion to the PPP. Additionally, the Act allowed certain entities to obtain "second draw"
PPP loans. By May 5, 2021, these additional funds had also been depleted.
65. One further amendment in the Consolidated Appropriations Act, 20;!1 made
"housing cooperatives" eligible for PPP loans when it was enacted December 2020-'-but not
homeowner associations, condominium associations, or other not-for-profit organizations. See
Pub. L. 116-260, § 311(a). This is despite the fact that HOA condominium-association groups,
along with country-club groups, lobbied Congress for their explicit inclusion.
66. Congress expanded the list of eligible recipients one last time near the end of the
final PPP application period-when the American Rescue Plan Act of 2021 was signed into law
on March 11, 2021 and included most 50l(c) organizations as "additional covered nonprofit
13
Case 3:22-cv-01285-GPC-KSC Document 1 Filed 08/30/22 PageID.150 Page 15
of 43
entities." Yet Congress still explicitly excluded 501(c)(4) organjzations-the only 501(c) status
for which a homeowners association or condominium association might be eligible. Thus.
homeowner associations and condominium associations were still clearly ineligible. And while
certain nonprofit country clubs were then eligible for PPP loans, they were only eligible for the
final weeks of the application period and only if they met the specific 501(c)(7) tax-exempt status.
See 86 Fed. Reg. 15083 (explaining that the American Rescue Plan Act changes only ''apply to
PPP loans approved. and loan forgiveness applications submitted, on or after March 11, 7.021").
~1
67. The eligibility rules relevant to the Defendants for various nonprofit ancl not-for-
profit organizations for PPP loans throughout the history of various congressional (l.Ctions is
summarized as follows:
Entitv Tv:ue Eligibili!I Status & Riston: ,
Always eligible
501(c)(3)nonprofits '
(CARES Act) '
Eligible on or after Dec. 27, 2020
Cooperative Associations
(Economic Aid Act)
Eligible on or after Mar. 11, 2021
501(c)(7) nonprofits
(American Rescue Plan)
501(c)(4) nonprofits Never eligible
Not-for-profit homeowners associations Never eligible
Not-for-profit condominium associations Never eligible
Not-for-profit country clubs Never eligible
68. Additionally, for entities that applied for a second-draw PPP loan, they again were
required to certify their eligibility under the effective rules. From SBA Form 2483-SD:
14
Case 3:22-cv-01285-GPC-KSC Document 1 Filed 08/30/22 PageID.151 Page 16
of 43
Paycheck Protection Program
Second Draw Borrowel" Application Form
Revised Man:h 18, :2021
By Signing Be-law, You Make the Following:Repres~ntatiom, Authorization'i, and Certificatiom:
l=lifythal:
• lbaveRadtbestatemmtsinduded-.in:thiflfoml.inclodingtheStatemtntsR.equiredbyLawandExecutiveOJdcra.andlundmtandtbem.
•
• indqlcmlcul=-
'Iho;lppliant. !ugclhcrwitb ils afliliab:s (Ifapplicable}. (I) i> 311 ,c!f-mq,toy,,d mdividual.or - ~ • - no
~ ; (2} rmp1oys"" .....,thon300 emplayi:co; (3} ifNAICS 72. emploJ" oo mnm thon300 empw,ocsperpb;ysic:al locali<j,; (4) if a
news mganizalion that is majmilyownedarcomvU.dby a NAlCS code S11110 or SIS I busiJles-.a11m1pmntpublic bmada5tiog {Dlilywith
a tiadc orln:ismrs!i umfa"NAICS code 511110 or 5151~ or-:m.Jntemct-oul_ynews orperi.odicalpublishrJ" :assigm:d NAICS code 5\9130 amt
eugogod in the col!ectiao. am! di"1ibution oflccal m: "lli<mal am! natioaa1 m:ws am! infinmatioo. rmp1oys no morethm300 emplaya:s per
1oatimJ; or (S} ifa SOl(c)(3} OIJ'.llllU'lfion. an mgilile SOl(cX6)--. <>Iha: eligiolc SOl(c) - - - digiblc deslinalinn maikding
mgan-on. rmploysno,..,._300emp!ay<esperphysicallccation.
• I will comply. whenever applicable, witbthe civi! rigl,!s amlolherlfml....,os in !hi, funn.
• All loan proceeds will beusedwly ib<hosiness-related pu,po,es as ,pccil!cd in the loanapplicaiion am! _ w i t h the Paych,cl<Pmmction
l'rognmRules illclDding du: pmhibilion on ming loan proceeds furlohbymj! activities amlexp,mliture,. ICApplic,mt is a..,.. "'l!aoizalion that
becameeligihteihr:aJoanunde:rSectioa.1170ftbeEoonomicAidtoHatd-BitSmallBusine5Se!i,Nmprofits,,andVenues.Act.pmceetlsoftheloa:n
will bcuml to support expenses at tbe compont'Ut o:f'lbe business concem. thatpmduc:es-m: disfribnreslocally focused.ora:nagrney· .iutbrmation..
Ir the Applicant is anlnll:mct-ooly news orpeiodicalpublisher that became elig,1,lc fur a Joa111mde< Soctioo SOD! ofthe Amaiao RfSCuc Phm
Acl<lf2021. tbepr"""'11s oftllo loan will be used tu supportcqiensc, at the compo11e111 of t h e - or otganizalion lhat supJ)<llls local or
rcg;Olllllnews.
• I '""""5tand 1hat SBA eoromag,s thepmcha,e. 1o the - fi:aswr., ofAmerican-made equipment andproduds.
• The Applicant is not engaged in.aDYadivitythatisillegal underredecll,, state or local taw.
69. Additionally, second-diaw PPP applications continued to requiie: another
certification that all information provided on the application is true and accurate in all material
respects as well as to certify their understanding that a false statement made in order to obtain a
guaranteed loan from the SBA is punishable under the law. From SBA Form 2483-SD:
70. Finally, qui tam lawsuits are an appropriate remedy for violations of the PPP rules
and regulations. In remarks given on February 17, 2021, for example, Acting Assistant Attorney
General Brian M. Boynton explained: "It is clear to me and my colleagues in the Civil Division-
and I'm sUie to all of you-that the False Claims Act will play a significant role in the com:ing years
as the government grapples with the consequences of this pandemic." As he further pointed out,
15
Case 3:22-cv-01285-GPC-KSC Document 1 Filed 08/30/22 PageID.152 Page 17
of 43
"[t]he vast majority of the funds distributed under these programs have gone to eligible n•cipients.
Unfortunately, some individuals and businesses applied for-and received- payments to w):iich they
were not entitled." Accordingly, "qui tams will continue to be an essential source of new leads,
and the Department [of Justice] will continue to rely on whistleblowers to help root out the misuse
and abuse of taxpayer funds."
VII. DEFENDANTS' FRAUD
71. Defendants knowingly told the SBA and participating lenders that they were
qualified entities to receive PPP loans, even though they are all not-for-profit homeowners
associations, condominium associations, or country clubs that do not qualify as qualified entities
under Congress's act. They also all knowingly misrepresented their need for these loans. Their
fraud deprived the United States of the ability to loan appropriated funds to qualified bu:Sinesses,
as the funding for PPP loans ran out shortly after Defendants applied for their loans.
72. Defendants' false certification that they were qualified occurred despite them
knowing or recklessly disregarding the fact that they were ineligible nonprofit organizations and
that not-for-profit organizations like them were not eligible for-profit businesses under SBA
Section 7(a) or "business interests" pursuant to the CARES Act or even SBA's guid:mce and
regulations. In fact, the SBA published-and, upon congressional amendments, updated, FAQs
for the PPP loans including an answer for "Who is Eligible"-and neither not-for-profit
community associations like housing associations and condominium associations nor not-for-
profit country clubs were ever listed in the answer to that question. The only community groups
that was ever listed were housing cooperatives, and that was after specific congressional
amendments to allow housing cooperatives to apply. Additionally, "non-profit businesses" were
explicitly excluded in official guidance, further telling Defendants-who are all non-profit or not-
16
Case 3:22-cv-01285-GPC-KSC Document 1 Filed 08/30/22 PageID.153 Page 18
of 43
for-profit organizations-that they were ineligible. Further, because the associations' lobbyists
were fighting for inclusion in the PPP, the Defendants inherently knew that they could n,\t qualify
without new amendments by Congress that never materialized. Defendants realized they <:ould slip
by rushed bankers and regulators by purporting to be a "business interest" without actually being
one.
73. Defendants' other false certifications-that economic uncertainty madd the PPP
loans necessary to support their ongoing operations-were in bad faith, given the strong finances
of Defendants and how they could raise money. The SBA required applicants to make this
certification in good faith and admonished applicants to consider "their ability to access other
sources of liquidity sufficient to support their ongoing operations in a manner that is not
significantly detrimental to the business." The SBA even gave an example of a business that could
not make this certification: "it is unlikely that a public company with substantial market value and
access to capital markets will be able to make the required certification in good faith." Tl1ere is no
circumstance under which a homeowners' association, condominium association, or not-for-profit
country club could certify in good faith that they do not have access to other sources of, liquidity
to support their ongoing operations. While Defendants were not public companies, they still had
substantial value of their own and access not only to capital markets but also a more readily
available source of funds-the wealthy members and assets. For example, Rancho Santa Fe as
recently as the fiscal year ending June 30, 2019 had almost $18 million in annual revenue and over
$60 million in total assets (including almost $16 million in cash, savings, and temporary cash
investments). Unlike businesses (who rely on sales by voluntary consumers, or other voluntary
business) or even 50 I (c)(3) nonprofits (who rely on voluntary donations), housing associations,
condominium associations, and not-for-profit country clubs do not rely on such voluntar; funding
17
Case 3:22-cv-01285-GPC-KSC Document 1 Filed 08/30/22 PageID.154 Page 19
of 43
subject to economic whims-instead, they rely on mandatory assessments and/or dues and fees
from their membership. Defendants' members are particularly wealthy, often with net worth of
tens of millions of dollars, and it would not have been a hardship to raise their assessments and/or
dues and fees in order to continue operations even assuming the highly doubtful proposition that
the pandemic represented a hardship on these defendants.
74. Furthermore, these associations and country clubs all have statutory authJrity and
powers including the power to make contracts and guaranties, incur liabilities, and iiecure its
obligations by mortgage and pledge of all or any of its property, franchises or income. See CAL.
CORP. CODE§ 7140. Homeowners associations and condominium associations generally have the
additional powers to assess a sum of money which if not paid by the owner of a parcel, can result
in a lien against the parcel. See CAL. CIV. CODE §§ 6800, 6820. These powers are furth,ir reason
that Defendants' false certifications that they needed the PPP loans were thus in knowing or
reckless ignorance of their true financial situation.
75. The Defendants' false certifications to the SBA and the lenders were material,
because the SBA and lenders were relying on the honesty of applicants to process PPP loans as
quickly as possible in order to get relief to American businesses as Congress intended.
76. Moreover, most of the Defendants, building on this fraud, have already applied for
loan forgiveness from the United States and had their loans forgiven in full, thus directly ,)epriving
the United States of the full amount of the loans and the interest accrued on the loans. The
forgiveness actually given (and forgiveness potential for entities that have not applied) is equal to
hundreds of thousands if not millions of dollars per Defendant.
77. Some of the Defendants went even further and applied for a second loan, '.yet again
i
fraudulently and falsely claiming that they were eligible entities under the CARES Act, even
18
Case 3:22-cv-01285-GPC-KSC Document 1 Filed 08/30/22 PageID.155 Page 20
of 43
though they are just homeowners associations, condominium associations, or not-for-profit
country clubs.
78. The damages suffered by the United States extended beyond the simple a·:mount of
the loans. The damages also include the Government's other incidental expenses supporting the
particular PPP loans. For example, Defendants induced the United States to pay fees to 9anks and
other financial institutions in order to execute these :fraudulent loans.
79. Each Defendant knowingly and falsely certified that it was "eligible to receive a
loan under the rules in effect at the time th[e] application is submitted." They also falsely certified
that "[c]urrent economic uncertainty makes this loan request necessary to support the ongoing
operations of the Applicant." Defendants each applied for and received loans in violation of the
FCA as summarized in the following table:
#of Date Amount of
Loan(s) Loan
Defendant Loans Loan(s) Loan
Amount Forgiven?••
Rec'd Approved . ~ Foreiven
Rancho Santa Fe Association
1 $1,542,100 04/11/20 Yes $1,551,738
rhttns ://www.rsfassociation.org/)
Beverly Hills Tennis Club, Inc. 1 $283,200 4/15/2020 Unknown Unknown
Bighorn Golf Club
1 $2,582,432 4/12/2020 Yes $2,612,489
(httos://www.bighomgolf.com/)
Bie:hom Homeowners Association Inc 1 $701,485 4/12/2020 Unknown : Unknown
Bodega Harbour Homeowners
1 $333,281 04/28/20 Yes $337,938
Association ·
Canyon Lake Property Owners
Association 1 $1,103,000 4/15/2020 Yes $1,113,907
(httns ://www.canvonlakeooa.com/)
$195,800 4/27/2020 Yes $197,829
Club Donatello Owners Association 2
$195,800 1/22/2021 Yes $197,274
Crown Towers Homeowners Association 1 $126,000 04/27/20 Yes $127,143
Four Seasons Homeowners Association 1 $125,000 04/29/20 Yes $126,397
Glendora Country Club 1 $471,685 04/15/20 Yes $474,412
Heritage Palms Homeowners
$350,000 4/29/20 Yes $351,860
Association 2
$661,558 02/03/21 Yes $666,615
(httos ://www .heritagepalmsindio.com/)
Heritage Ranch Owners Association 1 $256,700 5/1/2020 Yes i $259,645
19
Case 3:22-cv-01285-GPC-KSC Document 1 Filed 08/30/22 PageID.156 Page 21
of 43
Hidden Valley Lake Association I $893,300 04/29/20 Yes $900,819
Lake Of The Pines Association 1 $693,200 04/30/20 Yes $701,133
Monte Vista Grove Homes
I $951,000 5/8/2020 Yes $960,562
(https://www.mvgh.org/) :
North Coast Village Condominium
1 $359,900 4/28/2020 Yes $363,079
Association
PGA West Residential Associations, Inc. 1 $229,287 6/22/2020 Yes $232,440
The Palms Golf Club, Inc. $327,035 5/7/2020 Yes $328,791
2
Chttos ://thepalmsgc.org/) $425,260 2/5/2021 Yes $429,198
Pine Mountain Lake Association $687,500 04/14/20 Yes $692,045
2
Chttos://www.pinemountainlake.com/) $950,000 02/03/21 Yes $953,431
Regency Wilshire Homeowners'
Association
1 $151,000 04/28/20 Yes .
'
$152,427
:
San Diego Country Estates Association $970,200 4/13/20 Yes $977,244
2
(httos ://www.sdcea.net/) $849,971 2/1/21 Yes $855,909
The Santaluz Club, Inc 1 $1,250,000 4/8/2020 Yes $1,257,158
The Sea Ranch Association I $757,047 5/1/2020 Yes; In part $281,522
Seven Lakes Home Owners Association,
1 $324,355 4/27/2020 Yes $328,087
Inc
Shady Canyon Golf Club, Inc.
1 $1,689,200 4/3/20 Yes $1,698,595
(httos://WWW .shadycanyongolfclub.com/)
Sierra Towers Condominium .
1 $239,300 04/30/20 Yes $241,785
Association, Inc
Smith Ranch Homes Homeowners'
1 $815,640 4/28/20 Yes; In part · $218,540
Association
Sun City Lincoln Hills Community
Association 1 $1,424,800 05/03/20 Unknown Unknown
(httos ://suncitv-lincolnhills.org/)
Valley-Hi Countrv Club 1 $428,055 03/01/21 Yes $431,315
The Villages Golf and Country Club
1 $1,612,414 5/1/2020 Yes $1,631,942
(https ://www.thevillagesgcc.coml)
Wilshire-Holmby Homeowners
1 $183,250 04/28/20 Yes $184,239
Association Inc
The Wilshire-Westholme Homeowners
1 $147,250 04/27/20 Yes $148,186
Association, Inc
Woodhaven Country Club Homeowners
1 $331,800 4/30/2020 Yes $333,764
Association
Yosemite Lakes Owners' Association 1 $650,492 04/15/20 Yes $659,019
80. Rancho Santa Fe applied for and received a PPP loan of $1,542,100, approved on
i
April 11, 2020. In Rancho Santa Fe's application, Rancho Santa Fe knowingly and falsely certified
that it was "eligible to receive a loan under the rules in effect at the time th[e] application is
20
Case 3:22-cv-01285-GPC-KSC Document 1 Filed 08/30/22 PageID.157 Page 22
of 43
submitted." It also falsely certified that "[c]urrent economic uncertainty makes this loan request
necessary to support the ongoing operations of the Applicant." Rancho Santa Fe has applied for
forgiveness, and the United States forgave this loan (through its agent lender) in the amount of
$1,551,738 (including interest).
81. Beverly Hills Tennis applied for and received a PPP loan of $283,200, approved on
April 15, 2020. In Beverly Hills Tennis's application, Beverly Hills Tennis knowingly ai;d falsely
certified that it was "eligible to receive a loan under the rules in effect at the time th[e] application
is submitted." It also falsely certified that "[c]urrent economic uncertainty makes this loan request
necessary to support the ongoing operations of the Applicant." The current status of this loan is
unknown.
82. Bighorn Golf applied for and received a PPP loan of $2,582,432, approved, on April
12, 2020. In Bighorn Golfs application, Bighorn Golf knowingly and falsely certified tltat it was
"eligible to receive a loan under the rules in effect at the time th[e] application is subn\itted." It
also falsely certified that "[c]urrent economic uncertainty makes this loan request necessary to
support the ongoing operations of the Applicant." Bighorn Golf has applied for forgiveness, and
the United States forgave this loan (through its agent lender) in the amount of $2,612,489
(including interest).
83. Bighorn HOA applied for and received a PPP loan of $701,485, approved on April
12, 2020. In Bighorn HOA's application, Bighorn HOA knowingly and falsely certified that it was
"eligible to receive a loan under the rules in effect at the time th[ e] application is submitted." It
also falsely certified that "[c]urrent economic uncertainty makes this loan request nec,essary to
support the ongoing operations of the Applicant." The current status of this loan is unknown.
21
Case 3:22-cv-01285-GPC-KSC Document 1 Filed 08/30/22 PageID.158 Page 23
of 43
84. Bodega Harbour applied for and received a PPP loan of $333,281, approved on
April 28, 2020. In Bodega Harbour's application, Bodega Harbour knowingly and falsely certified
that it was "eligible to receive a loan under the rules in effect at the time th[e] application is
submitted." It also falsely certified that "[c]urrent economic uncertainty makes this loan request
necessary to support the ongoing operations of the Applicant." Bodega Harbour has applied for
forgiveness, and the United States forgave this loan (through its agent lender) in the !i]nount of
$337,938 (including interest).
85. Canyon Lake applied for and received a PPP loan of$1,l 03,000, approvec, on April
15, 2020. In Canyon Lake's application, Canyon Lake knowingly and falsely certified that it was
"eligible to receive a loan under the rules in effect at the time th[e] application is submitted." It
also falsely certified that "[c]urrent economic uncertainty makes this loan request nec,:ssary to
support the ongoing operations of the Applicant." Canyon Lake has applied for forgivehess, and
the United States forgave this loan (through its agent lender) in the amount of $1,113,907
(including interest).
86. Club Donatello applied for and received a PPP loan of$195,800, approved on April
27, 2020. Club Donatello also applied for and received a second PPP loan of $195,800, ;1pproved
on January 22, 2021. In Club Donatello's applications, Club Donatello knowingly ar,d falsely
'
certified that it was "eligible to receive a loan under the rules in effect at the time th[e] application
is submitted." It also falsely certified that "[c]urrent economic uncertainty makes this loan request
necessary to support the ongoing operations of the Applicant." Club Donatello has applied for
forgiveness, and the United States forgave its first loan (through its agent lender) in the 3:nount of
$197,829 (including interest). Club Donatello also applied for forgiveness for its second ;oan, and
22
Case 3:22-cv-01285-GPC-KSC Document 1 Filed 08/30/22 PageID.159 Page 24
of 43
the United States forgave this second loan (through its agent lender) in the amount of i,197,274
(including interest).
87. Crown Towers applied for and received a PPP loan of $126,000, approved on April
27, 2020. In Crown Towers's application, Crown Towers knowingly and falsely certified that it
was "eligible to receive a loan under the rules in effect at the time th[e] application is submitted."
It also falsely certified that "[c]urrent economic uncertainty makes this loan request nec:~ssary to
support the ongoing operations of the Applicant." Crown Towers has applied for forgiveness, and
the United States forgave this loan (through its agent lender) in the amount of $127,143 (including
interest).
88. Four Seasons applied for and received a PPP loan of $125,000, approved on April
29, 2020. In Four Seasons's application, Four Seasons knowingly and falsely certified that it was
"eligible to receive a loan under the rules in effect at the time th[e] application is submitted." It
also falsely certified that "[c]urrent economic uncertainty makes this loan request necessary to
support the ongoing operations of the Applicant." Four Seasons has applied for forgiveness, and
the United States forgave this loan (through its agent lender) in the amount of$126,397 (including
interest).
89. Glendora Club applied for and received a PPP loan of $471,685, approved on April
15, 2020. In Glendora Club's application, Glendora Club knowingly and falsely certified that it
was "eligible to receive a loan under the rules in effect at the time th[e] application is submitted."
It also falsely certified that "[c]urrent economic uncertainty makes this loan request necessary to
support the ongoing operations of the Applicant." Glendora Club has applied for forgiveness, and
the United States forgave this loan (through its agent lender) in the amount of $474,412 (including
interest).
23
Case 3:22-cv-01285-GPC-KSC Document 1 Filed 08/30/22 PageID.160 Page 25
of 43
90. Heritage Palms applied for and received a PPP loan of $350,000, approved on April
29, 2020. Heritage Palms also applied for and received a second PPP loan of$661,558, approved
on February 3, 2021. In Heritage Palms's applications, Heritage Palms knowingly and falsely
certified that it was "eligible to receive a loan under the rules in effect at the time th[ e] application
is submitted." It also falsely certified that "[c]urrent economic uncertainty makes this loan request
necessary to support the ongoing operations of the Applicant." Heritage Palms has applied for
forgiveness, and the United States forgave its first loan (through its agent lender) in the amount of
$351,860 (including interest). Heritage Palms also applied for forgiveness for its second loan, and
the United States forgave this second loan (through its agent lender) in the amount of $666,615
(including interest).
91. Heritage Ranch applied for and received a PPP loan of$256,700, approved on May
I
1, 2020. In Heritage Ranch's application, Heritage Ranch knowingly and falsely certifi~d that it
was "eligible to receive a loan under the rules in effect at the time th[e] application is submitted."
It also falsely certified that "[ c]urrent economic uncertainty makes this loan request necessary to
support the ongoing operations of the Applicant." Heritage Ranch has applied for forgiveness, and
the United States forgave this loan (through its agent lender) in the amount of$259,645 (including
interest).
92. Hidden Valley Lake applied for and received a PPP loan of $893,300, apf!roved on
April 29, 2020. In Hidden Valley Lake's application, Hidden Valley Lake knowingly and falsely
certified that it was "eligible to receive a loan under the rules in effect at the time th[ e] application
is submitted." It also falsely certified that "[c]urrent economic uncertainty makes this loa1 request
necessary to support the ongoing operations of the Applicant." Hidden Valley Lake ha;; applied
24
Case 3:22-cv-01285-GPC-KSC Document 1 Filed 08/30/22 PageID.161 Page 26
of 43
for forgiveness, and the United States forgave this loan (through its agent lender) in the amount of
$900,819 (including interest).
93. Lake of the Pines applied for and received a PPP loan of $693,200, appi"oved on
April 30, 2020. In Lake of the Pines's application, Lake of the Pines knowingly and falsely
certified that it was "eligible to receive a loan under the rules in effect at the time th[e] application
is submitted." It also falsely certified that "[c]urrent economic uncertainty makes this Imo request
necessary to support the ongoing operations of the Applicant." Lake of the Pines has a}iplied for
forgiveness, and the United States forgave this loan (through its agent lender) in the amount of
$701,133 (including interest).
94. Monte Vista Grove applied for and received a PPP loan of$951,000, approved on
May 8, 2020. In Monte Vista Grove's application, Monte Vista Grove knowingly and falsely
certified that it was "eligible to receive a loan under the rules in effect at the time th[e] application
is submitted." It also falsely certified that "[c]urrent economic uncertainty makes this loan request
necessary to support the ongoing operations of the Applicant." Monte Vista Grove has applied for
forgiveness, and the United States forgave this loan (through its agent lender) in the amount of
$960,562 (including interest).
95. North Coast Village applied for and received a PPP loan of $359,900, apwoved on
April 28, 2020. In North Coast Village's application, North Coast Village knowingly and falsely
certified that it was "eligible to receive a loan under the rules in effect at the time th[e] application
is submitted." It also falsely certified that "[c]urrent economic uncertainty makes this loan request
necessary to support the ongoing operations of the Applicant." North Coast Village ha:i applied
for forgiveness, and the United States forgave this loan (through its agent lender) in the amount of
$363,079 (including interest).
25
Case 3:22-cv-01285-GPC-KSC Document 1 Filed 08/30/22 PageID.162 Page 27
of 43
96. The Palms applied for and received a PPP loan of $327,035, approved oi1 May 7,
2020. The Palms also applied for and received a second PPP loan of $425,260, approved on
February 5, 2021. In The Palms's applications, The Palms Imowingly and falsely certified that it
was "eligible to receive a loan under the rules in effect at the time th[e] application is submitted."
It also falsely certified that "[ c]urrent economic uncertainty makes this loan request necessary to
support the ongoing operations of the Applicant." The Palms has applied for forgivenes,, and the
United States forgave its first loan (through its agent lender) in the amount of$328,791 (including
interest). The Palms also applied for forgiveness for its second loan, and the United States forgave
this second loan (through its agent lender) in the amount of$429,198 (including interest).
97. PGA West applied for and received a PPP loan of $229,287, approved on June 22,
2020. In PGA West's application, PGA West Imowingly and falsely certified that it was."eligible
to receive a loan under the rules in effect at the time th[e] application is submitted." It aI o falsely
1
certified that "[ c]urrent economic uncertainty makes this loan request necessary to support the
ongoing operations of the Applicant." PGA West has applied for forgiveness, and the United States
forgave this loan (through its agent lender) in the amount of $232,400 (including interest).
98. Pine Mountain Lake applied for and received a PPP loan of$687,500, approved on
April 14, 2020. Pine Mountain Lake also applied for and received a second PPP loan of $950,000,
approved on February 3, 2021. In Pine Mountain Lake's applications, Pine Mountiun Lake
Imowingly and falsely certified that it was "eligible to receive a loan under the rules in effect at
the tinle th[e] application is submitted." It also falsely certified that "[c]urrent economic
uncertainty makes this loan request necessary to support the ongoing operations of the Applicant."
Pine Mountain Lake has applied for forgiveness, and the United States forgave its jirst loan
(through its agent lender) in the amount of$692,045 (including interest). Pine Mountain Lake also
26
Case 3:22-cv-01285-GPC-KSC Document 1 Filed 08/30/22 PageID.163 Page 28
of 43
applied for forgiveness for its second loan, and the United States forgave this second loan (through
its agent lender) in the amount of $953,431 (including interest).
99. Regency Wilshire applied for and received a PPP loan of $151,000, ap_i:!oved on
April 28, 2020. In Regency Wilshire's application, Regency Wilshire knowingly and falsely
certified that it was "eligible to receive a loan under the rules in effect at the time th[e] application
is submitted." It also falsely certified that "[ c]urrent economic uncertainty makes this loa'l request
necessary to support the ongoing operations of the Applicant." Regency Wilshire has aJtplied for
forgiveness, and the United States forgave this loan (through its agent lender) in the amount of
$152,427 (including interest).
100. San Diego Country Estates applied for and received a PPP loan of $970,200,
approved on April 13, 2020. San Diego Country Estates also applied for and received a second
PPP loan of $849,971, approved on February 1, 2021. In San Diego Country Estates's
applications, San Diego Country Estates knowingly and falsely certified that it was "efigible to
receive a loan under the rules in effect at the time th[e] application is submitted." It ah,o falsely
certified that "[ c]urrent economic uncertainty makes this loan request necessary to support the
ongoing operations of the Applicant." San Diego Country Estates has applied for forgiveness, and
the United States forgave its first loan (through its agent lender) in the amount of S977,244
(including interest). San Diego Country Estates also applied for forgiveness for its second loan,
and the United States forgave this second loan (through its agent lender) in the amount of $855,909
(including interest).
101. Santaluz Club applied for and received a PPP loan of $1,250,000, approved on
April 8, 2020. In Santaluz Club's application, Santaluz Club knowingly and falsely certified that
it was "eligible to receive a loan under the rules in effect at the time th[ e] application is submitted."
27
Case 3:22-cv-01285-GPC-KSC Document 1 Filed 08/30/22 PageID.164 Page 29
of 43
It also falsely certified that "[c]urrent economic uncertainty makes this loan request nee ~ssary to
support the ongoing operations of the Applicant." Santaluz Club has applied for forgiveness, and
the United States forgave this loan (through its agent lender) in the amount of $1,257,158
(including interest).
102. Sea Ranch applied for and received a PPP loan of$757,047, approved on May 1,
2020. In Sea Ranch's application, Sea Ranch knowingly and falsely certified that it was "eligible
to receive a loan under the rules in effect at the time th[e] application is submitted." It al:io falsely
certified that "[c]urrent economic uncertainty makes this loan request necessary to support the
ongoing operations of the Applicant." Sea Ranch has applied for forgiveness, and the United States
forgave this loan in part (through its agent lender) in the amount of $281,522.
103. Seven Lakes applied for and received a PPP loan of $324,355, approvedpn April
27, 2020. In Seven Lakes's application, Seven Lakes knowingly and falsely certified tbat it was
"eligible to receive a loan under the rules in effect at the time th[e] application is submitted." It
also falsely certified that "[c]urrent economic uncertainty makes this loan request necessary to
support the ongoing operations of the Applicant." Seven Lakes has applied for forgiveness, and
the United States forgave this loan (through its agent lender) in the amount of$328,087 (including
interest).
104. Shady Canyon applied for and received a PPP loan of $1,689,200, approved on
April 3, 2020. In Shady Canyon's application, Shady Canyon knowingly and falsely certified that
it was "eligible to receive a loan under the rules in effect at the time th[ e] application is submitted."
It also falsely certified that "[c]urrent economic uncertainty makes this loan request nec'essary to
I
support the ongoing operations of the Applicant." Shady Canyon has applied for forgivej1ess, and
!
28
Case 3:22-cv-01285-GPC-KSC Document 1 Filed 08/30/22 PageID.165 Page 30
of 43
the United States forgave this loan (through its agent lender) in the amount of $1,698,595
(including interest).
105. Sierra Towers applied for and received a PPP loan of $239,300, approved. on April
30, 2020. In Sierra Towers's application, Sierra Towers knowingly and falsely certified that it was
"eligible to receive a loan under the rules in effect at the time th[e] application is submitted." It
also falsely certified that "[c]urrent economic uncertainty makes this loan request nec,~ssary to
support the ongoing operations of the Applicant." Sierra Towers has applied for forgiveness, and
the United States forgave this loan (through its agent lender) in the amount of$241,785 (including
interest).
106. Smith Ranch Homes applied for and received a PPP loan of $815,640, approved on
April 28, 2020. In Smith Ranch Homes's application, Smith Ranch Homes knowingly and falsely
certified that it was "eligible to receive a loan under the rules in effect at the time th[ e] application
is submitted." It also falsely certified that "[c]urrent economic uncertainty makes this loan request
necessary to support the ongoing operations of the Applicant." Smith Ranch Homes has applied
for forgiveness, and the United States partially forgave this loan (through its agent lender) in the
amount of$218,540.
107. Sun City applied for and received a PPP loan of $1,424,800, approved on May 3,
2020. In Sun City's application, Sun City knowingly and falsely certified that it was "eligible to
receive a loan under the rules in effect at the time th[e] application is submitted." It also falsely
certified that "[ c]urrent economic uncertainty makes this loan request necessary to support the
ongoing operations of the Applicant." The current status of this loan is unknown.
108. Valley-Hi applied for and received a PPP loan of$428,055, approved on March 1,
2021. In Valley-Hi's application, Valley-Hi knowingly and falsely certified that it was "eligible to
'
29
Case 3:22-cv-01285-GPC-KSC Document 1 Filed 08/30/22 PageID.166 Page 31
of 43
receive a loan under the rules in effect at the time th[e] application is submitted." It als.o falsely
certified that "[ c]urrent economic uncertainty makes this loan request necessary to support the
ongoing operations of the Applicant." Valley-Hi has applied for forgiveness, and the United States
forgave this loan (through its agent lender) in the amount of $431,315 (including interest).
109. The Villages applied for and received a PPP loan of$1,612,414, approved on May
1, 2020. In The Villages's application, The Villages knowingly and falsely certified that it was
"eligible to receive a loan under the rules in effect at the time th[e] application is submitted." It
also falsely certified that "[c]urrent economic uncertainty makes this loan request necessary to
support the ongoing operations of the Applicant." The Villages has applied for forgiveness, and
the United States forgave this loan (through its agent lender) in the amount of $1,631,942
(including interest).
110. Wilshire-Holmby applied for and received a PPP loan of $183,250, app:oved on
April 28, 2020. In Wilshire-Holmby's application, Wilshire-Holmby knowingly and falsely
certified that it was "eligible to receive a loan under the rules in effect at the time th[e] application
is submitted." It also falsely certified that "[c]urrent economic uncertainty makes this loan request
necessary to support the ongoing operations of the Applicant." Wilshire-Holmby has applied for
forgiveness, and the United States forgave this loan (through its agent lender) in the amount of
$184,239 (including interest).
111. Wilshire-Westholme applied for and received a PPP loan of $147,250, approved on
April 27, 2020. In Wilshire-Westholme's application, Wilshire-Westholme knowingly and falsely
certified that it was "eligible to receive a loan under the rules in effect at the time th[e] application
is submitted." It also falsely certified that "[c]urrent economic uncertainty makes this Ioa·1 request
necessary to support the ongoing operations of the Applicant." Wilshire-Westholme ha,, applied
30
Case 3:22-cv-01285-GPC-KSC Document 1 Filed 08/30/22 PageID.167 Page 32
of 43
for forgiveness, and the United States forgave this loan (through its agent lender) in the amount of
$148,186 (including interest).
112. Woodhaven Club HOA applied for and received a PPP loan of$331,800, approved
on April 30, 2020. In Woodhaven Club HOA's application, Woodhaven Club HOA ki10wingly
and falsely certified that it was "eligible to receive a loan under the rules in effect at the time th[e]
application is submitted." It also falsely certified that "[c]urrent economic uncertainty makes this
loan request necessary to support the ongoing operations of the Applicant." Woodhafen Club
HOA has applied for forgiveness, and the United States forgave this loan (through its agent lender)
in the amount of$333,764 (including interest).
113. Yosemite Lakes applied for and received a PPP loan of $650,492, approved on
April 15, 2020. In Yosemite Lakes's application, Yosemite Lakes knowingly and falsely certified
that it was "eligible to receive a loan under the rules in effect at the time th[e] application is
submitted." It also falsely certified that "[c]urrent economic uncertainty makes this loa11 request
necessary to support the ongoing operations of the Applicant." Yosemite Lakes has applied for
forgiveness, and the United States forgave this loan (through its agent lender) in the amount of
$659,019 (including interest).
VIII. ACTIONABLE CONDUCT BY DEFENDANTS
A. FALSE CLAIMS ACT
114. This is an action to recover damages and civil penalties on behalf of the United
States and the Relator arising from false or fraudulent statements, claims, and acts by Defendants
made in violation of the False Claims Act, 31 U.S.C. §§ 3729-32.
115. The FCA provides that any person who:
(A) knowingly presents, or causes to be presented, a false claim or
fraudulent claim for approval; [or]
31
Case 3:22-cv-01285-GPC-KSC Document 1 Filed 08/30/22 PageID.168 Page 33
of 43
(B) knowingly makes, uses, or causes to be made or used, a false record or
statement material to a false or fraudulent claim;
is liable to the Government for a civil penalty not less than $11,665 and not more than
$22,331 for each such claim, plus three times the amount of damages sustained by the
Government because of the false or fraudulent claim. See 31 U.S.C. § 3729(a)(l).
116. The FCA defines "claim" as:
(A) [] any request or demand, whether under a contract or otherwise, for
money or property and whether or not the United States has title to the
money or property, that-
(i) is presented to an officer, employee, or agent of the United States;
or
(ii) is made to a contractor, grantee, or other recipient, if the money
or property is to be spent or used on the Government's behalf or t.o
advance a Government program or interest, and if the United Stat,,s
Government-
(31) provides or has provided any portion of the money or
property requested or demanded; or
(II) will reimburse such contractor, grantee, or other
recipient for any portion of the money or property which is
requested or demanded ....
31 U.S.C. § 3729(b)(2).
117. The FCA allows any persons having knowledge of a false or frauduknt claim
against the Government to bring an action in feder!\l district court for themselves and for the
Government and to share in any recovery as authorized by 31 U.S.C. § 3730.
118. Based on these provisions, Relator Riner, on behalf of the United States and on his
own behalf, seeks through this action to recover damages and civil penalties aris\ng from
Defendants' violations of the False Claims Act.
32
Case 3:22-cv-01285-GPC-KSC Document 1 Filed 08/30/22 PageID.169 Page 34
of 43
B. DEFENDANTS' VIOLATIONS OF THE FALSE CLAIMS ACT
i. Presentation of False or Fraudulent Claims (31 U.S.C. § 3729(a)(l)(A))
'
119. In 2020 and 2021, Defendants knowingly presented false and fraudulent dlaims for
payment and approval directly to their lenders, deputized agents of the United States go\emment,
which falsely stated that they were eligible entities for PPP loans and that they needed the loans in
order to support their ongoing operations. The falseness of these claims was exacerba1ed when
Defendants applied for forgiveness of their loans and falsely certified that they complie(l with all
the requirements of the PPP Rules.
120. Due to Defendants' actions, Defendants collectively borrowed millions of dollars
of forgivable loans that, even if paid back, are also set at a below-market interest rate. These loans
were disbursed at the expense of countless United States businesses who qualified for PPP loans
but could not apply because Congress's funding ran out. Additionally, the United States has paid
millions of dollars to lenders for the forgiven loans, which is now lost. Accordingly, the United
States has suffered actual damages and is entitled to recover treble damages plus a civil inonetary
penalty for each false claim.
ii. Making or Using-or causing to be made or used-False Re~ords or
Statements Material to False or Fraudulent Claims (31 U.S.C. § 3729( 1)(l)(B))
1
121. In 2020 and 2021, Defendants made, use, or caused to be made or used, false
records or statements material to false or fraudulent claims paid or approved by the Government.
122. Defendants knew that their applications falsely certified that they were entities
eligible to receive PPP loans and that they falsely certified that the PPP loans were necessary to
support ongoing operations. Beyond Defendants' own direct claims, Defendants' false statements
knowingly caused these false claims, which were material to the lenders' eventual claims to the
United States for additional interest and loan-forgiveness reimbursement.
33
Case 3:22-cv-01285-GPC-KSC Document 1 Filed 08/30/22 PageID.170 Page 35
of 43
123. Due to Defendants' actions, Defendants collectively borrowed millions (,f dollars
of forgivable loans that their lenders' then received millions of dollars in payrr;,ents for
administering and reimbursing. The United States disbursed this money to the lenders at the
expense of countless United States businesses who qualified for PPP loans but could not apply
because Congress's funding ran out. Additionally, the United States has paid millions of dollars to
lenders for the forgiven loans, which is now lost. Accordingly, the United States has suffered actual
damages and is entitled to recover treble damages plus a civil monetary penalty for each false
claim.
C. DEFENDANTS' VIOLATIONS OF THE FALSE CLAIMS ACT ARE MATERIAL.
124. A false or fraudulent claim under subsection (a)(l)(A) or a false record or statement
under subsection (a)(l)(B) subjects a defendant to liability if it is material. The False Clf.(ims Act
defines "material" as "having a natural tendency to influence, or be capable of influencing, the
payment or receipt of money or property." 31 U.S.C. § 3729(b)(4).
125. The United States set up a multi-part process of reliance on others in order to
expeditiously execute the PPP program and keep the economy on track despite the COVID-19
Pandemic. First, Congress and the SBA authorized certain lenders to issue PPP loans without the
Government's prior review or express approval. Second, although lenders were delegated the
responsibility for determining borrower eligibility, the lenders were directed to uile forms
promulgated by the SBA that included numerous certifications-including a certifi~ation of
eligibility.
126. The lenders-and thus by extension the United States Government-relied heavily
on these certifications. Indeed, when the PPP was originally funded with $349 Billion, th{>se funds
I
were depleted less than three weeks after the CARES Act first passed. Lenders and the United
34
Case 3:22-cv-01285-GPC-KSC Document 1 Filed 08/30/22 PageID.171 Page 36
of 43
States Government instinctively relied on applicants' promises of eligibility, particularly when no
data submitted on the application obviously indicated ineligibility.
127. In particular, to process loans so quickly, lenders utilized an automated:tool that
compared loan data against publicly available information and identified anomalies .that may
indicate non-compliance purely based on this data. See SBA Procedural Notice, No. 5000-20092
(Feb. 10, 2021). 1 This data was largely limited to information about the number of emplqyees and
',
payroll size of applicant companies, which were key components to qualifications as ~vell. The
!
automated tool's focus on this data, however, meant that qualifications such as the fact that only
certain types of entities ("business interests" and certain specified other organizations) were less
noticeable and more tied to applicants' certification that they qualified for the PPP loan in the first
instance.
128. The SBA sometimes conducted additional data analysis beyond the automated tool
in order to identify noncompliant applicants. But again, their data analysis was limited tc'J the data
available and necessarily was unable to catch entities that applied for PPP loans but were not
"business interests" or other qualified organizations. Again, the SBA relied on the certiffoations of
applicants that they were qualified for SBA loans.
129. By making false and fraudulent misrepresentations that they were qualifie~l for PPP
loans and that they complied with all PPP requirements, the Defendants here took advantage of
the automated tool and data analyses used by lenders and the United States Government in order
to defraud those institutions. Defendants' certifications of qualification and compliance,
notwithstanding their knowledge that they did not qualify due to their HOA and condominium-
Available at https://www.sba.gov/sites/default/files/2021-02/Procedural%20Notice%205000-20092%20-
%20Revised%20PPP%20Procedures%20to%20Address%20Hold%20Codes-508.pdf.
35
Case 3:22-cv-01285-GPC-KSC Document 1 Filed 08/30/22 PageID.172 Page 37
of 43
association and not-for-profit country-club statuses, not only had the natural tendency to 'nfluence
the award and forgiveness of PPP loans but in fact did so. Defendants' fraudulent ;md false
certifications specifically evaded the compliance measures used by the United States Government
and participating lenders. Had Defendants told the truth, and noted that they lacked qualification
(or even that their qualifications were questionable) due to their HOA or condominium-association
or not-for-profit country-club status, they would not have received PPP loans or forgiwness for
those loans.
IX. CAUSES OF ACTION
A. COUNT I - PRESENTATION OF FALSE OR FRAUDULENT CLAIMS (31 U.S.C.
§ 3729(a)(l)(A))
130. Relator alleges and incorporates by reference each and every allegation contained
in paragraphs 1-118, 119-20, and 124--29 of this Complaint.
131. In 2020 and 2021, Defendants knowingly presented or caused to be preser;ted false
or fraudulent claims for payment or approval to the United States Government for PPP Loans and
forgiveness of their PPP Loans.
132. Specifically, Defendants submitted or caused the submission of false or fraudulent
claims when they applied for PPP loans and falsely and fraudulently stated that they wen: eligible
entities for PPP loans and that they needed the loans in order to support their ongoing operations,
even though they knew that they were ineligible and that they did not need the loans t,} support
their ongoing obligations.
133. The false PPP applications were "claims" under the FCA because they were
"request[s] or demand[s] ... for money or property ... that" were "presented to ar.. officer,
employee, oragentofthe United States." 31 U.S.C. § 3729(b)(2)(A)(i) (emphasis added}. Indeed,
they were requests for money submitted directly to financial institutions as agents of the United
36
Case 3:22-cv-01285-GPC-KSC Document 1 Filed 08/30/22 PageID.173 Page 38
of 43
States. Alternatively, the PPP applications were claims because the financial institutions were
"contractor[s], grantee[s], or other recipient[s]" of money who would be "reimburse[d] .,. for any
portion of the money or property which [wa]s requested or demanded." Id § 3729(b)(2)(,A)(ii).
134. Defendants also submitted or caused submission of claims when they aJ>plied for
forgiveness of their PPP loans and falsely and fraudulently certified that they complied with all
the requirements of the PPP Rules, even though they knew they did not.
135. The applications for forgiveness were likewise additional claims, beciuse they
further "request[ed] or demand[ ed]" money or property from the United States, similar to the initial
PPP loan applications. See 31 U.S.C. § 3729(b)(2)(A).
136. The United States Government, unaware of the material falsity of the claims made
or caused to be made by Defendants, approved, paid, and participated in payments made by the
Government's fiscal intermediaries for loans that were not allowed and in loan forgiveness that
otherwise was not allowed.
13 7. By reason of these payments, approvals, and loan forgivenesses, the Government
has been damaged in an amount yet to be determined. Accordingly, the United States suffered
actual damages and is entitled to recover treble damages plus a civil monetary penalty for each
presentment of a false claim.
B. COUNT Il - MAKING OR USING FALSE STATEMENTS MATERIAL TO FALSE OR
FRAUDULENT CLAIMS (31 U.S.C. § 3729(a)(l)(B))
13 8. Relator alleges and incorporates by reference each and every allegation contained
in paragraphs 1-118, 121-23, and 124----29 of this Complaint.
139. In 2020 and 2021, Defendants knowingly made, used, or caused to be made or used,
false records or statements material to false or fraudulent claims paid or approved by the
Government.
37
Case 3:22-cv-01285-GPC-KSC Document 1 Filed 08/30/22 PageID.174 Page 39
of 43
140. Defendants' statements of eligibility in their PPP applications were false.
Defendants knew that these statements were false because Defendants knew that they ,were not
business entities eligible to receive PPP loans.
141. Defendants' statements in their PPP applications that they that they needed the
loans in order to support their ongoing operations were false. Defendants knew that these
statements were false because they knew that they could continue their ongoing operations without
a PPP loan.
142. Defendants' statements in their applications for forgiveness that they complied with
all the requirements of the PPP Rules were false. Defendants knew that these statements were false
because they were ineligible for PPP loans and that they did not need the loans in order to support
their ongoing operations.
143. Defendants' false statements herein were material to their .claims false and
fraudulent claims for payment and approval that would be made to the United States Government
in conjunction with their statements. The statements also made the fmancial institutions' claims
for payment and reimbursement of loan money false and were material to those false claims, as
well.
144. Defendants' false statements were material because the Government's lending
agents-and by extension the United States Government itself-heavily relied on these
certifications in processing PPP loans as quickly as possible with the assistance of an automated
tool that itself would trust these certifications. Defendants' false statements thus not only had the
natural tendency to influence the award and forgiveness of PPP loans but in fact did so.
38
Case 3:22-cv-01285-GPC-KSC Document 1 Filed 08/30/22 PageID.175 Page 40
of 43
145. The United States Government, unaware of the material falsity of the claims made
or caused to be made by Defendants due to these material statements, approved, paid, and
participated in payments and forgiveness for loans that were not allowed.
146. But for Defendants' use of the materially false statements, the PPP loans would not
have been paid.
147. Because of their false or fraudulent statements, Defendants earned millions of
dollars through PPP loans to which they are not legitimately entitled. The ultimate subn:jssion to
the federal Government of claims for payment was a foreseeable consequence of this fmud. As a
result, the United States has suffered substantial damages and is entitled to recover treble damages
and civil monetary penalties.
X. PRAYER FOR RELIEF
148. WHEREFORE, Riner respectfully requests the Court enter judgmem against
Defendants for violations of the FCA and award the following:
a. damages in the amount of three times the actual damages suffered by the United
States as a result of Defendants' conduct;
b. Civil penalties against Defendants up to the maximum allowed by law for each
violation of31 U.S.C. § 3729;
c. The maximum awardRelator may recover pursuant to 31 U.S.C. § 3730(d);
d. All costs and expenses of the litigation, including attorneys' fees and costs of
court; and
e. All other relief on behalf of Relator or the United States that the Court deems
just and proper.
39
Case 3:22-cv-01285-GPC-KSC Document 1 Filed 08/30/22 PageID.176 Page 41
of 43
XI. DEMAND FOR JURY TRIAL
149. Pursuant to Federal Rule of Civil Procedure 38, Relator demands a trial by jury.
'
Respectfully submitted,
A~~
Randall C. Owens
State Bar No. 15380700
Michael Adams-Hurta
State Bar No. 24097860
WRIGHT CLOSE & BARGER, LLP
One Riverway, Suite 2200
Houston, Texas 77056
Telephone: (713) 572-4321
Telecopier: (713) 572-4320
owens@wrightclosebarger.com
hurta@wrightclosebarger.com
Attorneys for Relator Wade Riner
40
Case 3:22-cv-01285-GPC-KSC Document 1 Filed 08/30/22 PageID.177 Page 42
of 43
CERTIFICATE OF SERVICE
I hereby certify that on August 29, 2022, a true and correct copy of this Original Complaint
was forwarded to the United States Attorney's Office for the Southern District of Calif\>rnia and
the Department of Justice in Washington, D.C. via certified mail, return receipt requeste,1.
Isl Michael Adams-Hurta
Michael Adams-Hurta
41
Case 3:22-cv-01285-GPC-KSC Document 1 Filed 08/30/22 PageID.178 Page 43
of 43
Court Name; USDC California Southam
Div1s1on: 3
Rece1pt Number: CAS140196
Cash1er ID: bsandov
Transaction Date: 08/30/2022
Payer Name: Wright Close and Barger LLP
CIVIL FILING FEE- NON-PRISONER
For: Wrigit Close and Barger LLP
Case/Party: D-CAS-3-22-CIJ::001285-001
Amount: $402.00
CHECK
Check/Maney Order Num : 28223
Amt Tendered: $402 .00
Tota I Dua: ~402 .00
Tota I Tendered: 402 .00
Change /IJnt : .00
There Wi 11 be a fee of $53 .oo
charged for any returned check.
File and source
- File
- 1-relator-wade-riner-s-original-qui-tam-complaint-unsealed-v.pdf
- Size
- 1,632,675 bytes
- SHA-256
- 3d92f9fb337c209eb3bd372a90f82424e16cac787899d15997f0f270ad59eb24
- Original
- archive.org