Cienna Capital, LLC, a private, non-depository lender in New York City, has agreed to pay $26.3 million to settle fraud claims with the United States.  Allegedly, Ciena and its subsidiary Business Loan Center (BLC) submitted false claims for payment on loans made through the Small Business Administration (SBA).

The SBA guarantees up to 85% for the value of loans made by private lenders, thereby providing financial assistance to small businesses.  According to the United States, Ciena and BLC falsely certified that they met SBA regulations when they submitted claims for payment on loans they originated, underwrote, and serviced.  The loan scheme included falsifying loan documents, inflating property appraisals, and engaging in sham transactions.  The settlement also resolves allegations that Allied Capital Corporation, the defendants’ parent company, is liable for the acts of its subsidiaries. 

The settlement, which includes $18.1 million previously paid to the SBA, settles a lawsuit filed by James R. Brickman and Greenlight Capital Inc. under the qui tam provisions of the False Claims Act.  The whistleblowers will receive $4.3 million of the government’s recovery.

Click here to read the full article, “New York Small Business Lender to Pay U.S. $26.3 Million to Resolve False Claims Act Allegations”