ALEXANDRIA, Va. — Idaho-based construction contractor Engineered Structures, Inc. (ESI) has agreed to pay $5.75 million to settle allegations that it improperly obtained a Paycheck Protection Program (PPP) loan during the height of the COVID-19 pandemic, according to the U.S. Attorney’s Office for the Eastern District of Virginia.
The federal settlement centers on accusations that ESI, headquartered in Meridian, Idaho, was not eligible for the funding it received under pandemic relief programs designed to protect payroll and prevent layoffs in struggling businesses.
The case was brought through a whistleblower lawsuit titled United States ex rel. Karen Bloomfield v. Engineered Structures Inc. The lawsuit was filed under the False Claims Act, which allows private citizens to sue on behalf of the United States when they believe false claims for government funds have been made.
According to the whistleblower complaint, ESI wrongfully obtained an $8.6 million PPP loan, with allegations pointing to improper reporting of employee totals. The filing argued that ESI should have counted temporary workers from staffing firms as part of its workforce. Including those workers would have raised the company’s average employee count beyond 500 employees, a threshold that would have disqualified ESI from eligibility. The suit also alleged that ESI provided incorrect information on the PPP Loan Necessity Questionnaire, a required form for loan approval.
Although the United States declined to formally join the litigation, the whistleblower continued pursuing the case independently. The government later consented to the negotiated settlement. As is customary in cases of this nature, the whistleblower received a share of the recovered funds.
The settlement was handled by Assistant U.S. Attorney Gerard Mene, with involvement and support from the U.S. Small Business Administration, which helped administer PPP funds during the pandemic.
Officials emphasized that the settlement resolves civil allegations only. The press release notes that:
“The civil claims settled are allegations only; there has been no determination of civil liability.”
The case is available via PACER under case number 1:22-cv-789, and the press release is available through the U.S. Attorney’s Office for the Eastern District of Virginia.
Originally reported by United States Attorney's Office.
