California attorney Lisa Bloom and her husband have reached a settlement regarding allegations of misusing COVID-19 Paycheck Protection Program (PPP) funds. The Bloom Firm, a California law firm where Lisa Bloom and Braden Pollock are senior members, has agreed to pay a total of $274,000 to settle claims that they violated the False Claims Act by providing false information in support of a PPP loan forgiveness application. The Department of Justice (DOJ) announced this settlement in a news release on Thursday.
According to officials, Lisa Bloom is accused of using her law firm to obtain forgiveness of the firm’s first draw PPP loan by falsely certifying that the funds were used for eligible payroll expenses. It was found that The Bloom Firm used a portion of its PPP loan to pay employees who were not eligible to receive the funds or did not work for the firm during the covered period of the loan.
As part of the settlement, The Bloom Firm will pay $204,200.34, while Lisa Bloom and Braden Pollock will each pay $35,384.49. Principal Deputy Assistant Attorney General Brian M. Boynton, head of the DOJ’s Civil Division, emphasized the importance of holding accountable those who misuse taxpayer-funded programs like the PPP. He stated, “PPP loans were intended to provide critical relief to small businesses, and the department is committed to pursuing those who misused this program.”
The PPP was established by Congress in March 2020 as part of the CARES Act to provide emergency financial support to Americans facing economic hardship due to the COVID-19 pandemic. The program authorized forgivable loans to small businesses struggling to pay employees and other expenses. In December 2020, Congress approved funding for a “second draw” of PPP loan funds available to borrowers starting in January 2021.
When applying for PPP loan forgiveness, borrowers were required to certify the accuracy of all information provided in their applications, including the proper use of funds for eligible expenses such as payroll. The misuse of PPP funds has been a concern as investigations uncover instances of false certifications and ineligible expenses.
Lisa Bloom, known for her work representing women in sexual harassment cases, is the daughter of renowned attorney Gloria Allred. Both Bloom and her mother have been involved in high-profile cases, including representing women who accused Donald Trump of misconduct. Bloom’s reputation as an advocate for women’s rights has been tarnished by the allegations of misusing PPP funds.
Impact on Small Businesses
The misuse of PPP funds by entities like The Bloom Firm raises concerns about the impact on small businesses that legitimately relied on the program for financial support during the pandemic. Small businesses across the country faced unprecedented challenges as lockdowns and restrictions forced many to close or reduce operations. The PPP was designed to provide a lifeline to these businesses, helping them retain employees and cover essential expenses.
However, when funds are misused or obtained fraudulently, it undermines the integrity of the program and reduces the available resources for businesses in genuine need. Small businesses that played by the rules and used PPP funds responsibly may find themselves at a disadvantage if others exploit the system for personal gain.
Legal and Ethical Implications
The settlement reached by Lisa Bloom and her husband underscores the legal and ethical implications of misusing government assistance programs. The False Claims Act, which prohibits knowingly submitting false claims for government funds, is a crucial tool in combating fraud and abuse. Violations of this act can result in hefty fines, legal consequences, and damage to one’s reputation.
In the case of The Bloom Firm, the allegations of falsely certifying PPP loan forgiveness applications raise questions about the ethical standards of the legal profession. Attorneys have a duty to uphold the law and act in the best interests of their clients. When lawyers engage in misconduct or fraudulent activities, it not only reflects poorly on the individual but also on the legal profession as a whole.
Lessons Learned and Moving Forward
The settlement between Lisa Bloom and her husband serves as a reminder of the importance of transparency, accountability, and integrity in all aspects of business operations. As the COVID-19 pandemic continues to impact individuals and businesses worldwide, it is essential to uphold ethical standards and comply with regulations to ensure fair and equitable distribution of resources.
Moving forward, businesses should prioritize compliance with PPP guidelines, maintain accurate records of fund usage, and conduct internal audits to prevent misuse or fraud. Legal professionals, in particular, must adhere to ethical codes of conduct and uphold the trust placed in them by clients and the public.
In conclusion, the settlement between Lisa Bloom and her husband over allegations of misusing PPP funds highlights the consequences of violating government assistance programs and the importance of upholding ethical standards in business practices. As we navigate the challenges brought about by the pandemic, it is crucial to maintain integrity, transparency, and accountability to ensure the fair distribution of resources and support for those in need.