NEW YORK, Oct. 25, 2022 NYC whistleblower attorney Timothy J. McInnis announced a $86,676 settlement against The Rensselaerville Institute (TRI), a non-profit organization providing educational services for young people located in Delmar, NY. The settlement resolves False Claims Act allegations in a qui tam whistleblower complaint filed by former CFO Alexandra Poole under seal in August 2021 in the U.S. District Court for the Northern District of New York. The case was unsealed October 25, 2022, by order of United States Magistrate Judge Andrew T. Baxter. The United States Attorney’s Office for the Northern District of New York intervened in the action on October 18, 2022 and spearheaded the settlement, according to Attorney McInnis.
Poole’s complaint alleged that TRI defrauded the Small Business Administration (SBA) Payroll Protection Program (PPP) by knowingly overstating its average monthly payroll. TRI did this to unlawfully increase the amount of an SBA-guaranteed loan it could receive. The SBA subsequently determined TRI had, in fact, overstated its average monthly payroll on its PPP loan application and received excess funding of $86,676. Under the terms of the Settlement Agreement, TRI acknowledged and accepted responsibility for this conduct.
As stated in the Settlement Agreement, the PPP was established pursuant to the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, in March 2020. It was designed to provide emergency financial assistance to small businesses suffering economically from the COVID-19 pandemic through forgivable loans for payroll and other specified expenses. Poole’s complaint further alleges the SBA made approximately 5.2 million PPP loans, totaling nearly $700 billion, many with little or no lending controls or oversight.
While ensuing PPP fraud was rampant, there have been very few recoveries under the civil qui tam provisions of the False Claims Act, observed Attorney McInnis. These provisions allow private citizens to sue on behalf of the Government in order to help stop fraud against the United States and recover ill-gotten gains, McInnis explained. Even more rare, is a successful qui tam suit against a non-profit organization, McInnis said, noting he believes this is the first of its kind.
Under the terms of the Settlement Agreement, Poole, who is known as a qui tam relator, will receive $17,000 (19.6%) as a reward for initiating the lawsuit and prompting the Government’s investigation. Poole also alleged whistleblower retaliation/wrongful termination by TRI and that claim, as well as the amount of attorneys’ fees to be awarded to McInnis Law and co-counsel Tabner, Ryan and Keniry, LLP remain unresolved by the Settlement Agreement.
On behalf of Ms. Poole and her attorneys, Attorney McInnis expressed appreciation for the investigative and settlement efforts of the U.S. Attorney’s Office for the Northern District of New York and the SBA. The case is captioned, United States ex rel. Alexandra Poole v. The Rensselaerville Institute, Inc., et al., 1:21-cv-943, United States District Court for the Northern District of New York.
For additional information, please contact Attorney Timothy J. McInnis, of McInnis Law, 521 Fifth Avenue, 17th Fl., New York, NY 10175, at (212) 292-4573 or tmcinnis@mcinnis-law.com.
