Potomac Floral Wholesale Inc., a Silver Spring-based flower company, has agreed to pay $1.25 million to settle allegations of submitting false unemployment insurance claims during the COVID-19 pandemic. The settlement resolves a civil case brought by the U.S. and Maryland governments, based on a 2021 complaint from former employee Travis Gabriel. Small business owners can’t afford not to have strong legal advocacy when facing charges under whistleblower statutes. A Silver Spring, MD, business litigation lawyer can help you if you or your business is facing investigation for unethical practices or fraud.
According to the U.S. Attorney’s Office for Maryland, the company’s CEO, Tsur “Jacob” Reiss, instructed employees to apply for unemployment benefits while continuing to work without pay under the guise of being “furloughed.” This conduct, which spanned from March to December 2020, allegedly violated the False Claims Act, as unemployment benefits are meant exclusively for individuals not working.
Gabriel, a former sales manager, alleged that over 35 employees worked up to 30 hours per week without pay, resulting in hundreds of fraudulent claims submitted to Maryland’s Unemployment Insurance Trust Fund. When Gabriel objected and informed Reiss the practice was illegal, he was allegedly terminated in retaliation.
Reiss and Potomac Floral deny wrongdoing, with their attorney emphasizing that the settlement does not admit liability. They stated the decision to settle was made to avoid prolonged litigation.
Of the $1.25 million settlement, $250,000 will serve as restitution, with Gabriel receiving $243,750 as part of a whistleblower provision under the False Claims Act. The remaining funds will be split between federal and state governments.
Officials condemned the misuse of pandemic relief funds. “Attempting to unjustly profit from a global pandemic is absolutely wrong,” U.S. Attorney Erek Barron said, adding that unemployment benefits should support those truly in need.
How A Business Litigation Lawyer Helps Small Businesses In False Claims Allegations
False claims allegations can pose significant challenges for small businesses, often leading to financial penalties, reputational damage, and potential closure. A business litigation lawyer plays a critical role in navigating these complex situations.
The first step involves assessing the nature of the allegations. False claims cases, often brought under laws like the False Claims Act, require businesses to defend against accusations of fraud involving government funds or programs. A lawyer reviews the evidence, identifies weaknesses in the claims, and formulates a strong defense strategy.
They also guide businesses through legal compliance. Many false claims cases stem from unintentional violations due to unclear regulations. A litigation attorney helps businesses demonstrate good faith efforts toward compliance and mitigate liability. Another service business attorneys provide is to negotiate settlements when appropriate. Litigation can be lengthy and costly. An experienced attorney advocates for fair settlement terms, potentially reducing penalties while protecting the company’s future operations.
Finally, they provide representation in court if litigation proceeds. From filing responses to presenting arguments, a lawyer ensures the business’s side is fully articulated. If you are facing legal action, it’s critical to take swift action to protect yourself. The attorneys at Eric Siegel Law can help you initiate legal action to protect your business or defend you against actions taken against you. Call us today to learn more.