Settlement Agreement (PPP): United States, Ulma Forms Works, Inc. and Verity Investigations, LLC, Relator
Summary
Settlement Agreement among the United States (acting through the Department of Justice on behalf of the Small Business Administration), Ulma Forms Works, Inc. (Ulma) and Verity Investigations, LLC (Relator), concerning qui tam Civil Action No. 25-890 (JKS) (JRA) filed on or about January 30, 2025, in the District of New Jersey. The United States contends that Ulma certified in its January 26, 2021 Second Draw PPP application that it employed no more than 300 employees when, inclusive of its affiliates, it had more than 300. The loan was $2,000,000, and the SBA paid the lender a $60,000 processing fee. Ulma agrees to pay $2,902,795, of which $2,073,425 is restitution; the Relator's Share is $290,279, and Defendants pay Relator $9,288.
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“Settlement Agreement (PPP): United States, Ulma Forms Works, Inc. and Verity Investigations, LLC, Relator.”
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SETTLEMENT AGREEMENT
This Settlement Agreement ("Agreement") is entered into among the
United States of America, acting through the United States Department of
Justice and on behalf of the United States Small Business Administration
("SBA," and collectively the "United States"), Ulma Forms Works, Inc.
("Ulma"), and Verity Investigations, LLC ("Relator") (hereafter collectively
referred to as "the Parties"), through their authorized representatives.
RECITALS
A. Ulma is a New Jersey corporation with a principal place of
business in Bergen County, New Jersey. Ulma is a manufacturer and
supplier of concrete form work, shoring and temporary scaffolding systems.
B. On or about January 30, 2025, Verity Investigations, LLC filed a
qui tam action in the United States District Court for the District of New
Jersey captioned United States ex rel. Verity Investigations, LLC v. Ulma
Form Worhs, Inc., Civil Action No. 25-890 (JKS) (JRA), pursuant to the qui
tam provisions of the False Claims Act, 31 U.S.C. § 3730(b) (the Civil Action).
C. The United States contends that it has certain civil claims
against Ulma arising from the following facts and conduct:
1. The Coronavirus Aid, Relief, and Economic Security
("CARES") Act was a federal law enacted in or about March
2020 designed to provide emergency financial assistance to
millions of Americans suffering economic effects caused by
the COVID-19 pandemic. One source of relief provided by the
CARES Act was the authorization of forgivable loans to small
businesses for job retention and certain other expenses,
through a program referred to as the Paycheck Protection
Program ("PPP"). PPP loans were guaranteed by the SBA
and, if the loan proceeds were used for eligible expenses, the
SBA would forgive the loan balance and accrued interest.
11. To obtain a PPP loan, a qualifying business had to submit a
PPP loan application to an authorized lender. The PPP loan
application required the business, through its authorized
representative, to acknowledge the PPP rules and make
certain affirmative certifications that the applicant was
eligible to obtain a PPP loan.
m. On or about January 26, 2021, Ulma applied for a PPP loan
("Ulma's Second Draw PPP Loan"). At the time of its loan
application, businesses with more than 300 employees were
not eligible for PPP loans. Applicants were instructed that
the 300-employee limit was inclusive of the applicant's
affiliates. Under the rules in effect at the time of Ulma's
application, applicants were required to include affiliates'
employees based in the United States and abroad.
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1v. In its loan application, Ulma certified that it was eligible for
the loan and that it employed no more than 300 employees.
Ulma was not eligible for its loan because, inclusive of its
affiliates, Ulma had more than 300 employees.
v. Based on Ulma's certifications, a lender approved Ulma's
Second Draw PPP Loan application and issued a loan in the
amount of $2,000,000. In addition, pursuant to the PPP, the
SBA paid the lender a $60,000 processing fee in connection
with the lender's issuance of Ulma's Second Draw PPP Loan.
v1. Ulma subsequently applied for and received forgiveness of its
Second Draw PPP Loan, thernby extinguishing Ulma's
liability for the $2,000,000 principal loan amount, as well as
$13,425 in accrued interest.
D. This Settlement Agreement is neither an admission of liability
by Ulma nor a concession by the United States that its claims are not well
founded.
E. Relator claims entitlement under 31 U.S.C. § 3730(d) to a share
of the ·proceeds of this Settlement Agreement and to Relator's reasonable
expenses, attorneys' fees and costs.
To avoid the delay, uncertainty, inconvenience, and expense of
protracted litigation of the above claims, and in consideration of the mutual
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promises and obligations of this Settlement Agreement, the Parties agree and
covenant as follows:
TERMS AND CONDITIONS
1. Ulma shall pay to the United States two million, nine hundred
and two thousand, seven hundred and ninety-five dollars ($2,902,795)
(Settlement Amount), of which $2,073,425 is restitution, by electronic funds
transfer pursuant to written instructions to be provide~l by the United States
Attorney's Office for the District of New Jersey no later than 30 days after
the Effective Date of this Agreement.
2. Conditioned upon the United States receiving the Settlement
Amount and as soon as feasible after receipt, the United States shall pay two
hundred ninety thousand, two hundred and seventy-nine dollars ($290,279)
to Relator by electronic funds transfer (Relator's Share).
3. Within 30 days of the Effective Date of the Agreement,
Defendants will pay to Relator nine thousand, two hundred and eighty eight
dollars $9,288 for expenses, attorneys' fees, and costs pursuant to 31 U.S.C. §
3730(d). Defendants and Relator agree that this amount represents
reasonable expenses, attorney's fees, and costs for the Civil Action.
4. Subject to the exceptions in Paragraph 6 (concerning reserved
claims) below, and upon the United States' receipt of the Settlement Amount,
the United States releases Ulma from any civil or administrative monetary
claim the United States has for the Covered Conduct under the False Claims
C)
\
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Act, 31 U.S.C. §§ 3729-3733; the Program Fraud Civil Remedies Act, 31
U.S.C. §§ 3801-3812; or the common law theories of breach of contract,
payment by mistake, unjust enrichment, and fraud.
5. Subject to the exceptions in Paragraph 6 below, and upon the
United States' receipt of the Settlement Amount, Relator, for himself/herself
and for his/her heirs, successors, attorneys, agents, and assigns, releases
Ulma from any civil monetary claim the Relator has on behalf of the United
States for the Covered Conduct under the False Claims Act, 31 U.S.C. §§
3729-3733.
6. Notwithstanding the releases given in Paragraph 4 of this
Agreement, or any other term of this Agreement, the following claims and
rights of the United States are specifically reserved and are not released:
a. Any liability arising under Title 26, U.S. Code (Internal
Revenue Code);
b. Any criminal liability;
c. Except as explicitly stated in the Agreement, any
administrative liability or enforcement right, or any
administrative remedy, including the suspension and
debarment rights of any federal agency;
d. Any liability to the United States (or its agencies) for any
conduct other than the Covered Conduct;
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e. Any liability based upon obligations created by this
Agreement; or
f. Any liability of individuals.
7. Relator and its heirs, successors, attorneys, agents, and assigns
shall not object to this Agreement but agree and confirm that this Agreement
is fair, adequate, and reasonable under all the circumstances, pursuant to 31
U.S.C. § 3730(c)(2)(B). Conditioned upon Relator's rnceipt of the Relator's
Share, Relator and its heirs, successors, attorneys, agents, and assigns fully
and finally release, waive, and forever discharge the United States, its
agencies, officers, agents, employees, and servants, from any claims arising
from the filing of the Civil Action or under 31 U.S.C. § 3730, and from any
claims to a share of the proceeds of this Agreement and/or the Civil Action.
8. Relator fully and finally releases Ulma, its employees,
successors, assigns, agents, and representatives, from any claims (including
attorneys' fees, costs, and expenses of every kind and however denominated)
that Relator has asserted, could have asserted, or may assert in the future
against Ulma, its employees, successors, assigns, agents, and
representatives, related to the Covered Conduct, including but not limited to
claims asserted under the False Claims Act, 31 U.S.C; §§ 3729-3733; the
Program Fraud Civil Remedies Act, 31 U.S.C. §§ 3801-3812; or the common
law theories of breach of contract, payment by mistake, unjust enrichment,
and fraud.
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9. Ulma waives and shall not assert any defenses Ulma may have
to any criminal prosecution or administrative action relating to the Covered
Conduct that may be based in whole or in part on a contention that, under
the Double Jeopardy Clause in the Fifth Amendment of the Constitution, or
under the Excessive Fines Clause in the Eighth Amendment of the
Constitution, this Agreement bars a remedy sought in such criminal
prosecution or administrative action.
10. Ulma fully and finally releases the United States, its agencies,
officers, agents, employees, and servants, from any claims (including
attorneys' fees, costs, and expenses of every kind and however denominated)
that Ulma has asserted, could have asserted, or may assert in the future
against the United States, its agencies, officers, agents, employees, and
servants, related to the Covered Conduct or the United States' investigation
or prosecution thereof.
11. Ulma fully and finally releases Relator, and Relator's successors,
attorneys, agents, and assigns, from any claims (including attorneys' fees,
costs, and expenses of every kind and however denominated) that Ulma has
asserted, could have asserted, or may assert in the future against Relator,
and Relator's successors, attorneys, agents, and assigns, related to the
Covered Conduct or the United States' investigation or prosecution thereof.
12. a. Unallowable Costs Defined: All costs (as defined in the
Federal Acquisition Regulation, 48 C.F.R. § 31.205-47) incurred by or on
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behalf of Ulma, and its present or former officers, directors, employees,
shareholders, and agents in connection with:
(1) the matters covered by this Agreement;
(2) the United States' audit(s) and civil investigation(s)
of the matters covered by this Agreement;
(3) Ulma's investigation, defense, and corrective
actions undertaken in response to the United
States' audit(s) and civil investigation(s) in
connection with the matters covered by this
Agreement (including attorheys' fees);
(4) the negotiation and performance of this Agreement;
(5) the payment Ulma makes to the United States
pursuant to this Agreement and any payments that
Ulma may make to Relator, including costs and
attorneys fees,
are unallowable costs for government contracting purposes (hereinafter
referred to as Unallowable Costs).
b. Future Treatment ofUnallowable Costs: Unallowable
Costs will be separately determined and accounted for by Ulma, and Ulma
shall not charge such Unallowable Costs directly or indirectly to any contract
with the United States.
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c. Treatment of Unallowable Costs Previously Submitted for
Payment: Within 90 days of the Effective Date of this Agreement, Ulma shall
identify and repay by adjustment to future claims for payment or otherwise
any Unallowable Costs included in payments previously sought by Ulma or
any of its subsidiaries or affiliates from the United States. Ulma agrees that
the United States, at a minimum, shall be entitled to recoup from Ulma any
overpayment plus applicable interest and penalties as a result of the
inclusion of such Unallowable Costs on previously-submitted requests for
payment. The United States, including the Department of Justice and/or the
affected agencies, reserves its rights to audit, examine, or re-examine Ulma's
books and records and to disagree with any calculations submitted by Ulma
or any of its subsidiaries or affiliates regarding any Unallowable Costs
included in payments previously sought by Ulma, or the effect of any such
Unallowable Costs on the amount of such payments.
14. This Agreement is intended to be for the benefit of the Parties
only.
15. Upon receipt of the payment described in Paragraph 1, above,
the United States and Relator shall promptly sign and file in the Civil Action
a Joint Stipulation of Dismissal of the Civil Action pursuant to Rule 41(a)(l).
16. Except as set forth in Paragraph 3, above, each Party shall bear
its own legal and other costs incurred in connection with this matter,
including the preparation and performance of this Agreement.
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17. Each Party and signatory to this Agreement represents that it
freely and voluntarily enters into this Agreement without any degree of
duress or compulsion.
18. This Agreement is governed by the laws of the United States.
The exclusive jurisdiction and venue for any dispute relating to this
Agreement is the United States District Court for the District of New Jersey.
For purposes of construing this Agreement, this Agreement shall be deemed
to have been drafted by all Parties to this Agreement and shall not, therefore,
be construed against any Party for that reason in any subsequent dispute.
19. This Agreement constitutes the complete agreement between
the Parties. This Agreement may not be amended except by written consent
of the Parties.
20. The undersigned counsel represent and wanant that they are
fully authorized to execute this Agreement on behalf of the persons and
entities indicated below.
21. This Agreement may be executed in counterparts, each of which
constitutes an original and all of which constitute one and the same
Agreement.
22. This Agreement is binding on Ulma's successors, transferees,
heirs, and assigns.
23. This Agreement is binding on Relator's successors, transferees,
heirs, and assigns.
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24. All parties consent to the United States' disclosure of this
Agreement, and information about this Agreement, to the public.
25. This Agreement is effective on the date of signature of the last
signatory to the Agreement (Effective Date of this Agreement). Facsimiles of
signatures shall constitute acceptable, binding signatures for purposes of this
Agreement.
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THE UNITED STATES OF AMERICA
DATED:Cff/2-< ;;;d}>z:::::
David V. Simunovich
0
Assistant United States Attorney
Health Care Fraud Unit
U.S. Attorney's Office - District of New Jersey
United States Department of Justice
970 Broad Street, Suite 700
Newark, New Jersey 07102
(973) 645-2700
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ULMAFORM INC. - DE ENDANT
DATED: _ _ _ _ _ _BY: - - 1 - - - - - - - - \ - ' r , ; ; ; : , - - = . - < - - - - - -
Martin lejan ~Landreau
Chief Fi ancial fficer
Ulma Form Wor s, Inc.
16-00 Route 208, uite LL4
Fair Lawn, New Jersey 08110
DATED: _ _ _ _ _ ~~~kl R~Q
K&L Gates LLP
210 Sixth Avenue
Pittsburg, PA 15222-2613
Counsel for Ulma Fann Worhs, Inc.
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VERITY INVESTIGATIONS, LLC - RELATOR
DATED: 8/18/2025
Gregory Lynam
Member
Verity Investigations, LLC
DATED: 8/19/2025 BY:_Q_t«¼ __
Steven M. Shepard, Esq.
Susman Godfrey, LLP
One Manhattan West, 50th Floor
New York, New York 10001
Counsel for Relator Verity Investigations, LLC
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