A Southern California law firm founded by the daughter of women’s rights attorney Gloria Allred has agreed to pay a settlement of more than $200,000 after providing false information to obtain coronavirus hardship funds from the federal government.
The Bloom Firm, which is based in Calabasas; its founder, Lisa Bloom; and business manager Braden Pollock agreed to pay a total of nearly $275,000 to settle accusations of filing false information to obtain funds through the Paycheck Protection Program (PPP), which is part of the Coronavirus Aid, Relief and Economic Security (CARES) Act. The federal program provided emergency financial support to Americans and businesses that suffered hardships during the Covid pandemic.
The Bloom Firm sought forgiveness of the firm’s PPP loan by falsely affirming that the funds were used for payroll expenses as outlined in the PPP program, according to a U.S. Department of Justice news release. The settlement agreement states that companies seeking loan forgiveness must affirm that the funds subject to forgiveness must have been used to retain employees.
The firm’s use of the PPP funds were deemed ineligible because four people hired by the Bloom Firm during the covered period did not perform the same duties as those they replaced and one former worker did not perform any work between March 1, 2020, and Aug. 18, 2021.
The defendants are required to pay $274,969 total, which includes $108,153 in restitution. The firm itself is required to pay $204,200, while Bloom and Pollock are on the hook for $35,384 each, according to the settlement terms.
“PPP loans were intended to provide critical relief to small businesses,” Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division, said in a prepared statement. “The department is committed to pursuing those who misused this taxpayer-funded program.”
The Department of Justice’s actions grew out of a civil lawsuit filed in 2021 in the Central District of California, Liberty Law Office Inc. v. Bloom Firm. Liberty Law, an Oakland-based firm, was involved in a joint venture with the Bloom Firm in 2020 and later alleged that the Bloom Firm exaggerated its employee numbers.
“The Bloom Firm represented in their May of 2020 (PPP) application that they had 240 employees,” the 2021 lawsuit states. “However, when Relator (Liberty Law) was in a joint venture with The Bloom Firm … Relator was only aware of a maximum of 25 employees, nowhere near the claimed 240 employees.”
The Bloom Firm at the time indicated that it had $3.16 million in payroll expenses, according to the lawsuit.
The State Bar of California declined to indicate whether it is pursuing any review of attorneys associated with the Bloom Firm.
“The State Bar of California cannot confirm whether an investigation is under way,” a State Bar spokesman told the Southern California Record in an email. “By law, disciplinary investigations are confidential, unless confidentiality is waived pursuant to the provisions of Business and Professions Code. …”
The Liberty Law complaint, however, alleged that the actions of the Bloom Firm did violate the Rules of the State Bar.
The Justice Department alleged that the Bloom Firm violated the federal False Claims Act. A whistleblower provision in that law allows private parties such as Liberty Law to file civil lawsuits on behalf of the U.S. government for false claims.
As of April of this year, the Justice Department’s COVID-19 Fraud Enforcement Task Force has filed criminal charges against more than 3,500 defendants over the misuse of $2 billion in Covid relief funds, secured more than 400 civil settlements and judgments amounting to more than $100 million and seized more than $1.4 billion in assets, according to a Justice Department news release.
The Bloom Firm did not respond to a request for comment.