Blow the Whistle! Paycheck Protection Program Fraud with a False Claims Act Twist

In what appears to be a first of its kind case, the Department of Justice (DOJ) has reached a settlement agreement with Seth A. Bernstein, the owner of All In Jets LLC dba JetReady. According to the Complaint, Bernstein applied for a PPP loan on behalf of JetReady, a jet charter operator located in Florida. The Complaint alleges Bernstein received over $1M in PPP funds and shortly thereafter, diverted almost $100K of those funds to pay for personal expenses.

Unlike the numerous other instances of PPP misappropriation we have been tracking, this matter was not discovered through an audit or typical DOJ investigation. These allegations were brought to light by a whistleblower through a qui tam lawsuit. The whistleblower, Victoria Hablitzel, is a former employee of JetReady who was laid off in March. According to the Complaint, Hablitzel was asked to provide the payroll information for the PPP application and, upon receipt of the funds, she was directed to transfer varying amounts of the funds to multiple different accounts.

Under the terms of the Settlement Agreement, Bernstein must pay $287,055 to the United States to settle the allegations. As the whistleblower, Hablitzel will receive $57,411.

For more information on all PPP enforcement cases, go to our special webpage at that compiles, organizes, and tracks the enforcement actions and prosecutions being pursued by the government in the PPP and pandemic-related EIDL programs.

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