Idaho construction company settles paycheck protection program loan allegations

ALEXANDRIA, Va. – Engineered Structures, Inc. (ESI), located in Meridian, Idaho, paid $5,750,000 to settle civil fraud allegations that it was ineligible for a Paycheck Protection Program (PPP) loan that it received during the COVID-19 pandemic.

The settlement began with a lawsuit, United States ex rel. Karen Bloomfield v. Engineered Structures Inc., filed under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims presented to the federal government.

The whistleblower complaint alleged that ESI received an $8.6 million PPP loan for which it was ineligible. According to the complaint, ESI should have included temporary workers from staffing agencies in its employee headcount, which would have increased ESI’s average employee count above 500 employees, making ESI ineligible for the PPP loan. The complaint also contended that ESI made false representations in connection with its PPP Loan Necessity Questionnaire. After the United States declined to intervene formally in the litigation, the whistleblower continued the litigation. ESI agreed to pay $5,750,000 to settle the whistleblower’s allegations. The United States consented to the settlement. The whistleblower received a share of the settlement.

The matter was handled by Assistant U.S. Attorney Gerard Mene with the assistance of the U.S. Small Business Administration.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Case records may be found on PACER under case number 1:22-cv-789.

The civil claims settled are allegations only; there has been no determination of civil liability.