Whistleblower James R. Brickman and Greenlight Capital Inc., have successfully settled a qui tam suit under the federal False Claims Act against Ciena Capital LLC, a private, non-depository lender. Brickman and Greenlight will recieve $4.3 Million of the $26.3 million that Ciena will pay to resolve allegations that it violated SBA regulations for federally-funded loans. Ciena’s disregard for “SBA rules, regulations, and underwriting requirements” resulted in quick loan defaults, says the DoJ. Patrick Harrington, an Executive VP for subsidiary Business Loan Center, pleaded guilty to the conspiracy and admitted originating some of the bad loans and to “falsifying loan documents, inflating property appraisals, and using straw purchasers to engage in sham transactions.” Harrison will spend 10 years in prison for his role in the scheme. Allied Capital Corporation, Ciena’s parent company, has absolved itself of any liability through the settlement agreement.
To report SBA lending fraud or other False Claims Act violations, contact Frohsin & Barger.