McCabe Rabin Announces the First Whistleblower Qui Tam Settlement in Florida
for Violations of the Paycheck Protection Program
McCabe Rabin announces the settlement of United States ex. rel. Hablitzel v. All in Jets, LLC and Seth A. Bernstein, No. 20-cv-61420-Altonaga in the U.S. District Court for the Southern District of Florida. Adam Rabin and Lauren Johnson, together with co-counsel Harris Nizel at Nizel Law, represented the whistleblower.
The case is the first False Claims Act (FCA) case alleging violations of the Paycheck Protection Program (PPP) rules to settle in Florida and the fourth in the United States.
On March 27, 2020, Congress created the PPP as part of the Coronavirus Aid, Relief and Economic Security Act (CARES Act). The PPP enabled qualifying small businesses (less than 500 employees) to obtain forgivable loans, backed by the Small Business Administration (SBA), for the limited purpose of covering payroll costs, rent, mortgage interest, and utilities for a specified period.
On April 27, 2020, a jet chartering company based in South Florida, All in Jets, LLC d/b/a JetReady, received a PPP loan totaling $1,173,382. Upon receipt, the company’s owner, Seth A. Bernstein (“Bernstein”), immediately diverted $98,929 to pay for personal expenses, including a donation to help build a drive-in movie theater for summer residents in Nantucket, Massachusetts, a transfer of funds to a construction company to build a sports/recreation court at Bernstein’s home, and payments made to a third-party medical practice.
On July 6, 2020, the firm’s whistleblower client, a former accountant for the company, filed a sealed action under the False Claims Act against the company and Bernstein, asserting that certain PPP loan proceeds were not used for authorized purposes. On August 9, 2020, the company filed bankruptcy.
After a year-long investigation by the Department of Justice and U.S. Attorney’s Office for the Southern District of Florida, the case ultimately settled with Bernstein individually for a total of $366,440.756, including recovery of the whistleblower’s attorney’s fees. Under the terms of the settlement, the Government will receive $287,055, a recovery that approximates treble damages, a remedy available under the FCA. The Government will pay $57,411 as the “relator share” to the whistleblower.
McCabe Rabin thanks Assistant United States Attorney James Weinkle, DOJ Trial Attorney Jonathan Gold, and SBA attorney Arlene Embrey, for conducting an efficient and thorough investigation that led to a successful resolution of the case, notwithstanding that the company had filed bankruptcy.
Each year, taxpayers lose billions of dollars due to fraud perpetrated on government programs such as the PPP. Under the qui tam provisions of the FCA, whistleblowers are entitled to share in the recovery of funds that government programs have paid out to participants based upon the submission of false claims.
McCabe Rabin Congratulates Lauren Johnson on Becoming a Partner with the Firm
McCabe Rabin congratulates attorney Lauren Johnson on becoming a partner with the firm. Lauren has been with the firm since 2017 and practices in the areas of complex business litigation and whistleblower qui tam litigation.
Lauren joined the firm after serving as a law clerk for both U.S. Magistrate Judge William Matthewman and Florida Supreme Court Justice Jorge Labarga.
In recent years, Lauren has risen the ranks of the Palm Beach County Bar Association (PBCBA), currently serving as President of its Young Lawyers Section and as a member of PBCBA’s Board of Directors. As President of the Young Lawyers Section, Lauren has been focusing on the diversity of the section, improving professionalism and civility among young lawyers, and finding ways to increase mentorship and professional opportunities for the section’s members.
When asked about Lauren’s new position with and contribution to McCabe Rabin, firm partner Adam Rabin stated, “Lauren brings a unique energy and enthusiasm to our firm that perfectly complements her high standards of practice and passion to represent her clients. She represents everything good about lawyering, including setting an example at our firm and within the community.”
McCabe Rabin Welcomes Havan Clark to the Firm
McCabe Rabin welcomes Havan Clark to the firm as a new associate. Havan will be practicing in all of the firm’s practice areas, including complex business litigation, securities litigation and arbitration, and whistleblower qui tam litigation.
Havan joins the firm after serving as a law clerk to U.S. District Judge Donald M. Middlebrooks in the Southern District of Florida.
Havan graduated with honors from the University of North Carolina School of Law, where she was an Articles Editor for the North Carolina Law Review. In law school, Havan received Certificates of Merit for the highest grades in Research, Reasoning, Writing, and Advocacy I and II. She also worked as a legal intern at the Southern Poverty Law Center and the American Immigration Council, supporting attorneys in administrative and court proceedings that sought to protect the rights of immigrants.
Before attending law school, Havan completed her undergraduate studies at Emory University.
The firm is excited for Havan to join our team. If you would like to reach out to Havan, please email her at firstname.lastname@example.org.
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