Florida resorts to pay $325,000 to settle false claims act allegations

FLORIDA – Two Florida resort companies have agreed to pay $325,000 to settle false claims act allegations related to the alleged false certification on a Paycheck Protection Program loan forgiveness application.

Florida companies Kingwood Orlando Reunion Resort LLC (Orlando Reunion) and Kingwood Crystal River Resort Corp. (Crystal River) have agreed to settle allegations that they violated the False Claims Act (FCA) and the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) by knowingly providing false information in support of a Paycheck Protection Program (PPP) loan forgiveness application submitted by Crystal River, said the U.S. Department of Justice (DOJ).

According to the DOJ, Orlando Reunion and Crystal River, which reportedly are related but operate separate resorts, both received separate PPP loans. The United States alleged that Crystal River sought forgiveness of its PPP loan, in part, by certifying that it used a portion of its PPP loan to pay wages of Crystal River employees when in fact, some of the employees to whom it claimed to have paid wages were actually Orlando Reunion employees whom Crystal River did not employ or pay.

As a part of the settlement announced on Tuesday, Crystal River and Orlando Reunion agreed to pay $271,720 in damages and penalties under the FCA and $53,280 in civil penalties under FIRREA.

“PPP loans were intended to help small businesses retain employees and keep their doors open during the pandemic,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division.

“The department is committed to holding accountable those who knowingly and improperly sought PPP loans or forgiveness of those loans.”

“A primary mission of the United States Attorney’s Office is protecting government programs from fraud,” said U.S. Attorney Roger Handberg for the Middle District of Florida.

“We will continue to hold accountable those who abuse the CARES Act and PPP Program at the expense of the taxpayers.”

According to the DOJ, the settlement resolved a lawsuit filed under the qui tam or whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery. The qui tam lawsuit was filed by the former Director of Human Resources for Kingwood resorts. The whistleblower will receive approximately $46,000 in connection with the settlement.

The resolution obtained in this matter was the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the Middle District of Florida, with assistance from the SBA’s Office of General Counsel and the SBA OIG.

This matter was handled by Trial Attorney Jared S. Wiesner of the Civil Division and Assistant U.S. Attorney Jeremy R. Bloor for the Middle District of Florida.

The claims resolved by the settlement are allegations only. There has been no determination of liability.