Luxury Home Builders and Owners to Pay $2.65 Million to Resolve Loan Fraud Allegations — Carnegie Homes & Construction LLC and Signature Collection Inc., Houston

Summary

A press release in which U.S. Attorney Nicholas J. Ganjei announced that four companies and their three owners agreed to pay millions to resolve allegations that they submitted false claims for Paycheck Protection Program (PPP) loans. The companies named are Carnegie Homes & Construction LLC, Signature Collection Inc., The Everstone Group and The Mosaic Group LLC, and the owners named are Ram Gupta, Arpan Gupta and Sapna Patel. According to the allegations, the Guptas and Patel obtained PPP loans by falsely reporting payroll costs, misrepresenting the number of employees and falsifying the purpose of the loans, and submitted false information to justify loan forgiveness. The civil settlement, which SBA-OIG puts at $2.65 million, resolves False Claims Act claims brought after a whistleblower lawsuit a Houston-area realtor filed in October 2021.

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HOUSTON – Four companies and their three owners have agreed to pay millions to resolve allegations they allegedly submitted false claims for federally funded loans under the Paycheck Protection Program, announced U.S. Attorney Nicholas J. Ganjei.

Carnegie Homes & Construction LLC and Signature Collection Inc. (also operating as Fifty Seventh & 7 TH Luxury Homes) design and build high-end residential luxury homes. Ram Gupta and Arpan Gupta own Carnegie and Signature, respectively. The Everstone Group provides consulting and construction services. Sapna Patel is the director and sole member of Everstone and also owns The Mosaic Group LLC.

The civil settlement resolves claims brought under the False Claims Act following a whistleblower lawsuit a Houston-area realtor filed in October 2021.

According to the allegations, the Guptas and Patel applied for and received PPP loans by falsely reporting payroll costs, misrepresenting the number of employees they employed and falsifying the purpose of the loans. This resulted in the submission of alleged ineligible and improper claims for payment to the United States. In addition, they allegedly submitted false information to justify loan forgiveness.

“Those who misuse federal programs to falsely obtain public funds are stealing from the American people,” said Ganjei. “This settlement reflects our commitment to recovering ill-gotten gains and vindicating the interests of the taxpayer.”

“The Small Business Administration’s pandemic relief programs were created to help legitimate small businesses keep employees on the payroll during an unprecedented crisis, not to be exploited through false claims,” said Acting Special Agent in Charge Michelle Blank of SBA-Office of Inspector General. “This $2.65 million settlement underscores that misuse of PPP funds will be pursued, and SBA-OIG will continue working with the Department of Justice and our law enforcement partners to protect taxpayer dollars and safeguard the integrity of SBA programs.”

Under the False Claims Act, a private party (relator) can file a complaint on behalf of the United States and receive a portion of the recovery.

SBA-OIG conducted the investigation. Assistant U.S. Attorney Jill O. Venezia handled the matter.

The claims resolved by the settlement are allegations only and there has been no determination of liability.

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