U.S. Department of Labor OIG, Floral Company Pays $1.25 Million To Resolve False Claims Act Allegations Of Defrauding Unemployment Insurance Program During Covid-19 Pandemic (USAO D-MD 07/17/2024) (2024-07-18)
Summary
A July 17, 2024 press release from the U.S. Attorney's Office for the District of Maryland announcing that Potomac Floral Wholesale, Inc. and its owner and CEO Tsur "Jacob" Reiss agreed to pay the United States and the State of Maryland $1,250,000.00 to resolve False Claims Act allegations over unemployment insurance claims. According to the settlement agreement, from March 1, 2020 to December 31, 2020 the company and Reiss told a group of employees to apply for unemployment benefits while also instructing them to keep working without pay. The settlement also resolves a whistleblower suit by Travis Gabriel, Civ. No. TDC-21-0207, and Gabriel will receive $243,750.00. The release states the settlement is not an admission of liability. The Department of Labor Office of Inspector General investigated.
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“U.S. Department of Labor OIG, Floral Company Pays $1.25 Million To Resolve False Claims Act Allegations Of Defrauding Unemployment Insurance Program During Covid-19 Pandemic (USAO D-MD 07/17/2024) (2024-07-18).”
Original at www.oig.dol.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/u-s-department-of-labor-oig-floral-company-pays-1-25-million-to-resolv-302bb24a1e/
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PRESS RELEASE
Floral Company Pays $1.25
Million To Resolve False Claims
Act Allegations Of Defrauding
Unemployment Insurance
Program During Covid-19
Pandemic
Wednesday, July 17, 2024
For Immediate Release
U.S. Attorney's Office, District of Maryland
Baltimore, Maryland – Potomac Floral Wholesale, Inc. and Tsur “Jacob” Reiss have
agreed to pay the United States and State of Maryland $1,250,000.00 to resolve
allegations that they caused the submission of false unemployment insurance (UI) claims
at the beginning of the COVID-19 pandemic.
The settlement agreement was announced by Erek L. Barron, U.S. Attorney for the
District of Maryland; Troy W. Springer, Special Agent in Charge of the National Capital
Region, U.S. Department of Labor – Office of Inspector General (DOL-OIG); and Portia Y.
Wu, the Secretary of Labor for the State of Maryland.
“Attempting to unjustly profit from a global pandemic is absolutely wrong,” said United
States Attorney Erek Barron. “Unemployment insurance is meant for employees who
need it when they are laid off from their jobs. During the early stages of COVID-19, the
Federal Pandemic Unemployment Compensation program was designed to supplement
traditional unemployment insurance for employees laid off during an unprecedented
global emergency. Employers should not use tax dollars to shirk their responsibility to
pay employees for their work.”
“The unemployment insurance (UI) program offered critical financial support to
American workers who were unable to work due to the immense challenges created by
the COVID-19 pandemic,” said Troy W. Springer, Special Agent in Charge of the National
Capital Region, U.S. Department of Labor, Office of Inspector General (DOL-OIG). “This
civil settlement demonstrates the strong commitment, resolve, and partnership of the
DOL-OIG and U.S. Attorney’s Office to hold accountable those who seek to unlawfully
exploit the UI program at the expense of those who actually need it.”
Potomac Floral is a wholesale floral company run by Owner and CEO Tsur “Jacob” Reiss.
According to the settlement agreement, from March 1, 2020 to December 31, 2020,
starting immediately after the COVID-19 pandemic forced the suspension or
modification of American business activity, Potomac Floral and Reiss instructed a group
of their employees to apply for UI benefits. Yet, they also instructed these same
employees to continue working for Potomac Floral without pay. Because individuals
collecting UI must be unemployed, not completing work for an employer, Potomac
Floral’s and Mr. Reiss’s conduct caused the submission of false UI claims in violation of
the False Claims Act.
The civil settlement also resolves claims filed under the whistleblower provision of the
False Claims Act by Travis Gabriel in United States & State of Maryland ex rel. Travis
Gabriel v. Potomac Floral Wholesale, Inc. & Tsur “Jacob” Reiss, Civ. No. TDC-21-0207 (D.
Md). The False Claims Act permits private parties to file suit on behalf of the United
States for false claims and obtain a portion of the recovery. As part of the civil
resolution, Mr. Gabriel will receive $243,750.00.
The claims resolved by this settlement are allegations. The settlement is not an
admission of liability by Potomac Floral or Tsur Reiss, nor a concession by the United
States that its claims are not well founded.
U.S. Attorney Erek L. Barron praised the DOL-OIG for its work in the investigation. Mr.
Barron thanked Assistant U.S. Attorney Matt Haven who handled the case.
For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources
available to report fraud, please visit www.justice.gov/usao-
md and https://www.justice.gov/usao-md/report-fraud.
###
Contact
Angelina Thompson
USAMD.Press@usdoj.gov
(301) 344-4338
Updated July 17, 2024
Topic
FALSE CLAIMS ACT
Component
USAO - Maryland
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