Engineered Structures, Inc. (ESI), a construction company based in Meridian, Idaho, has agreed to pay $5.75 million to resolve civil fraud allegations related to its receipt of a Paycheck Protection Program (PPP) loan during the COVID-19 pandemic.
The settlement follows a lawsuit filed under the whistleblower provision of the False Claims Act. This law allows private individuals to file lawsuits on behalf of the United States when they believe false claims have been made to the federal government.
According to the whistleblower complaint, ESI obtained an $8.6 million PPP loan despite being ineligible. The complaint alleged that ESI should have counted temporary workers from staffing agencies as part of its employee total, which would have pushed its average headcount above 500 employees and made it ineligible for the loan. The complaint also claimed that ESI made false statements on its PPP Loan Necessity Questionnaire.
After the United States decided not to intervene formally in the case, the whistleblower continued with the litigation independently. ESI ultimately agreed to settle by paying $5.75 million, and the U.S. government approved this agreement. As is customary in such cases, the whistleblower received a portion of the settlement.
Assistant U.S. Attorney Gerard Mene managed the matter with support from the U.S. Small Business Administration.
The U.S. Attorney’s Office for the Eastern District of Virginia published this announcement and noted that these are only allegations; there has been no determination of civil liability.
