Private Asset Manager, Majority Owner Settle False Claims Act Allegations Relating to Improper Paycheck Protection Program Loan

AUSTIN, Texas - Lafayette RE Management LLC, a private asset manager based in New York City, and Thibault Adrien, Lafayette's founder and majority owner, have agreed to pay $680,000 to settle allegations that they violated the False Claims Act by knowingly making false certifications to the government in applying for, and receiving forgiveness of, a Paycheck Protection Program (PPP) loan.

Congress created the PPP in March 2020, as part of the Coronavirus Aid, Relief and Economic Security (CARES) Act, to provide emergency financial support to millions of Americans suffering the economic effects caused by the COVID-19 pandemic. Under the PPP, eligible businesses could obtain short-term, low-interest, forgivable loans, guaranteed by the Small Business Administration (SBA), to spend on payroll costs, rent or mortgage, and other specified business expenses. Applicants were required to make certain affirmative certifications in order to be eligible to obtain the PPP loan, including that (1) "current economic uncertainty" made the loan necessary to support the applicant's ongoing operations, and (2) the funds will be used to retain workers, maintain payroll, or for other authorized purposes prescribed by Congress and the SBA.

The United States alleged that Lafayette and Adrien applied for and received a $335,000 PPP loan by falsely certifying that the loan was economically necessary due to the uncertainty caused by the pandemic. The United States further contended that Lafayette and Adrien's application to SBA seeking forgiveness of the entire loan amount contained false statements.

The allegations in this case were initially brought by Jesus Nunez-Unda in a lawsuit filed under the qui tam, or whistleblower, provisions of the False Claims Act. Under those provisions, a private party known as a relator can file an action on behalf of the United States and receive a share of any recovery. The qui tam case is captioned United States ex rel. Nunez-Unda v. Lafayette RE Management LLC, Brandywine Homes USA LLC, and Thibault Adrian, No. 5:22-cv-000659 (W.D. Tex.).

Assistant U.S. Attorney Samuel M. Shapiro represented the United States in the settlement.

The claims resolved by this settlement are allegations only and there has been no determination of liability.

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