2024-12-11 DOJ SDNY pdf 35,036 chars

United States v. Belovefine, Ltd., et al.

raw: 23cv2159 Settlement Stipulation And Consent Judgment

23cv2159 Settlement Stipulation And Consent Judgment (S.D.N.Y. Dec. 11, 2024)

Caption: United States v. Belovefine, Ltd., et al.

Exhibit of U.S. Attorney Reaches $1.47 Million Civil Fraud Settlement With Owner Of Footwear Business For Submitting False Information To Obtain Paycheck Protection Program Loans

Source PDF JSON

summary

Stefano Maroni, GMI USA Corp., and Belovefine, Ltd. were found guilty of fraud in connection with Paycheck Protection Program loan and forgiveness applications, and Maroni agreed to pay $1,470,085.65 in restitution.

paragraph

The case involved allegations of fraud in connection with the submission of Paycheck Protection Program loan and forgiveness applications. Maroni, on behalf of Belovefine and GMI, applied for and received PPP loans by misrepresenting the number of employees and payroll costs, resulting in receiving loan amounts exceeding what the businesses were entitled to. Maroni has agreed to pay $1,470,085.65 in restitution to the government and cooperate with further investigations.

narrative

The United States District Court for the Southern District of New York has entered a stipulation and order of settlement and dismissal in a case brought by the United States of America and Devyn Taylor against Stefano Maroni, GMI USA Corp., and Belovefine, Ltd. The case involved allegations of fraud in connection with the submission of Paycheck Protection Program loan and forgiveness applications. Maroni, on behalf of Belovefine and GMI, applied for and received PPP loans by misrepresenting the number of employees and payroll costs, resulting in receiving loan amounts exceeding what the businesses were entitled to. Maroni has agreed to pay $1,470,085.65 in restitution to the government and cooperate with further investigations. The stipulation also includes provisions for default, bankruptcy proceedings, and the reservation of certain claims. The document is a legal agreement between the United States and Maroni, where Maroni agrees to pay $1,470,085.65 to settle a claim related to all

Enriched metadata

Scheme: financial-fraud (100%)
Court: Southern District of New York

Classified financial-fraud(confidence 100%). EDGAR detection: forms 10-K/10-Q/8-K/NT 10-K· recall 67% / precision 23%. detection rule →

Extracted insights

Dollar amounts 10

$1.47M $1,470,085 $1M–$10M
$735K $735,042 $100K–$1M
$380K $379,562 $100K–$1M
$307K $306,535 $100K–$1M
$223K $223,400 $100K–$1M
$192K $192,320 $100K–$1M
$152K $151,825 $100K–$1M
$123K $122,614 $100K–$1M
$114K $113,825 $100K–$1M
$54K $53,531 $10K–$100K

Entities 7

company belovefine, ltd.
person damian williams
person devyn taylor
company gmi usa corp.
company gmi usa corp. and belovefine, ltd.
person stefano maroni
location United States

Triples 13

Devyn Taylor filed complaint under qui tam provisions of False Claims Act
Stefano Maroni owned and was CEO GMI USA Corp. and Belovefine, Ltd.
GMI USA Corp. obtained PPP loans separate first and second-draw loans
Belovefine, Ltd. obtained PPP loans separate first and second-draw loans
Defendants made false representations in PPP loan and forgiveness applications
United States alleges violations of False Claims Act by Defendants
Stefano Maroni signed PPP loan applications as authorized representative
GMI USA Corp. was based in New York City
Belovefine, Ltd. was based in New York City
PPP was established pursuant to CARES Act
United States intervened in case ex rel. Devyn Taylor
Parties entered into Stipulation of Settlement and Dismissal
Damian Williams represented United States as United States Attorney

PDF

23cv2159 Settlement Stipulation And Consent Judgment · Source

Text layers

Extracted body text (35,036c)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

UNITED STATES OF AMERICA ex rel. DEVYN
TAYLOR,

Plaintiff,

-v-

STEFANO MARONI, GMI USA CORP., and
BELOVEFINE, LTD.,

Defendants.

23 Civ. 2159 (JHR)

UNITED STATES OF AMERICA,

Plaintiff-Intervenor,

-v-

STEFANO MARONI, GMI USA CORP., and
BELOVEFINE, LTD.,

Defendants.

STIPULATION AND ORDER

OF SETTLEMENT AND DISMISSAL

WHEREAS, this Stipulation and Order of Settlement and Dismissal (“Stipulation”) is

entered into by and among (i) plaintiff the United States of America (the “United States” or

“Government”), by its attorney, Damian Williams, United States Attorney for the Southern District

of New York, and on behalf of the United States Small Business Administration (the “SBA”);

(ii) the relator Devyn Taylor (“Relator”), by her authorized representative; and (iii) defendant

Stefano Maroni (“Maroni,” and together with the Government and Relator, the “Parties”), by their

authorized representatives;

WHEREAS, GMI USA Corp. (“GMI”) and Belovefine, Ltd. (“Belovefine”) were

companies based in New York City that designed, developed, and sold footwear;

WHEREAS, between 2020 and 2022, Maroni was the owner and the Chief Executive

Officer of both GMI and Belovefine;

WHEREAS, GMI and Belovefine are no longer doing business or in operation;

WHEREAS, the Paycheck Protection Program (“PPP”) was established pursuant to the

Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, which was enacted in March

2020 and was designed to provide emergency financial assistance to millions of Americans

suffering economic effects caused by the COVID-19 pandemic. One source of relief provided by

the CARES Act was the authorization of forgivable loans to small businesses for employee payroll

and certain other expenses through the PPP. To obtain a PPP loan, a qualifying business was

required to submit a PPP loan application, which is signed by an authorized representative of the

business. The loan application requires the business—through its authorized representative—to

acknowledge the PPP program’s rules (the “PPP Rules”) and make certain affirmative

certifications regarding its eligibility to obtain the PPP loan. In addition, the business is required

to provide, among other things, its: (a) average monthly payroll expenses; and (b) number of

employees. Following the lender approvals of loan applications, the participating lenders funded

the loans, which were 100% guaranteed by the SBA;

WHEREAS, on or about March 14, 2023, Relator filed a complaint under the qui tam

provisions of the False Claims Act (“FCA”), 31 U.S.C. § 3729 et seq., against Defendants Maroni,

GMI, and Belovefine (collectively, “Defendants”), alleging that Defendants violated the FCA by

making numerous false representations in Defendants’ applications for PPP loans and for the

forgiveness of those loans, and fraudulently secured separate PPP loans for GMI and Belovefine

even though the two companies were in fact one and the same business (the “Relator Complaint”);

WHEREAS, the United States alleges that Defendants violated the FCA by knowingly

presenting and making, or causing to be presented and made, false certifications and statements in

connection with their submission of PPP loan and forgiveness applications on behalf of GMI and

Belovefine. The United States alleges that Defendants improperly obtained separate first and

second-draw PPP loans for GMI and Belovefine when the two entities in fact operated essentially

the same business during the relevant timeframe, using a single office space and sharing the same

employees. Specifically, the United States further alleges that Defendants (i) falsely certified in

Belovefine’s PPP loan applications that the company had employees for whom it paid salaries and

payroll taxes as of February 15, 2020, which was a PPP loan eligibility requirement; (ii) inflated

payroll figures in their PPP loan and forgiveness applications by double-counting the salaries of

shared employees of both GMI and Belovefine, when in fact only one of these entities paid these

employees’ salaries and payroll taxes at a given time; and (iii) improperly sought loan forgiveness

for certain payroll costs in excess of allowable forgiveness amounts, when Defendants had reduced

employee salaries by more than the amount permitted under PPP Rules. The conduct described

in this Paragraph is the “Covered Conduct” for purposes of this Stipulation;

WHEREAS, contemporaneous with the filing of this Stipulation, the United States is filing

a Notice of Election to Intervene and Complaint-in-Intervention in the above-referenced qui tam

action (the “Government Complaint”), in which it is asserting claims against Defendants under the

FCA and common law for the Covered Conduct;

WHEREAS, the Parties have, through this Stipulation, reached a mutually agreeable

resolution addressing the claims asserted against Maroni in the Government Complaint and the

Relator Complaint for the Covered Conduct;

NOW, THEREFORE, upon the Parties’ agreement IT IS HEREBY ORDERED that:

TERMS AND CONDITIONS

1. The Parties agree that this Court has subject matter jurisdiction over this action and

consent to this Court’s exercise of personal jurisdiction over each of them.

2. Maroni admits, acknowledges, and accepts responsibility for the following conduct

(the “Admitted Conduct”):

a. Maroni was the sole owner and CEO of GMI and Belovefine. Both entities
operated the same footwear business and shared the same leased office space in
Manhattan. In 2019, the footwear business’s employees were all paid by
Belovefine. In early 2020, prior to applying for PPP loans, Maroni transferred
all of the footwear business’s employees to GMI’s payroll. Between 2020 and
2022, the footwear business employed fewer than 20 employees at a given time.

b. In April 2020 and May 2020, Maroni caused to be submitted separate
applications for first-draw PPP loans on behalf of Belovefine and GMI,
respectively. Belovefine received a first-draw PPP loan in the amount of
$379,562, and GMI received a first-draw PPP loan in the amount of $223,400.
In July and October 2021, Maroni caused to be submitted applications for
forgiveness for the first-draw PPP loans on behalf of Belovefine and GMI,
respectively. Belovefine’s first-draw PPP loan was forgiven in full, and
$192,320 of GMI’s first-draw PPP loan was forgiven, along with related fees
and interest.

c. In February 2021, Maroni caused to be submitted applications for second-draw
PPP loans on behalf of Belovefine and GMI, respectively. Belovefine
received a second-draw PPP loan in the amount of $306,535, and GMI received
a second-draw PPP loan in the amount of $113,825. In February and March
2022, Maroni caused to be submitted applications for forgiveness for the
second-draw PPP loans on behalf of GMI and Belovefine, respectively.
Belovefine’s and GMI’s second-draw PPP loans were forgiven in full, along
with related fees and interest.

d. Maroni personally signed the PPP loan and forgiveness applications on behalf
of Belovefine and GMI. These applications included certain inaccurate

information. Prior to signing both the PPP loan and forgiveness applications,
Maroni recklessly failed to confirm the accuracy of the information contained
in the applications and that the applications complied with PPP Rules.

e. Maroni certified in Belovefine’s and GMI’s PPP loan applications, among other
things, that: GMI and Belovefine were each eligible to receive a PPP loan; the
PPP funds would be used only for permissible costs under the PPP Rules; and
that the information provided in the application and the supporting documents
was true and accurate in all material respects. In Belovefine’s and GMI’s PPP
loan forgiveness applications, Maroni certified, among other things, that: the
dollar amount for which forgiveness was requested was used to pay business
costs that were eligible for forgiveness; they had accurately verified the
payments for the payroll costs for which they were seeking forgiveness and had
accurately calculated the forgiveness amount requested; and the information
provided in the forgiveness applications and supporting documents was true and
correct in all material respects.

f. During all periods covered by Belovefine and GMI’s first-draw and second-
draw PPP loans, the two companies shared the same office space at 3 Columbus
Circle, Suite 2410, New York, New York. GMI listed this address in its PPP
loan applications. However, Belovefine incorrectly listed a different suite
number in its loan applications, which gave the impression that the entities were
distinct and operated in separate locations.

g. In order to be eligible for a PPP loan, the applicant needed to be in operation as
of February 15, 2020, and have employees for whom it paid salaries and payroll
taxes. The first and second-draw PPP applications submitted on behalf of
Belovefine misrepresented that the company had employees for whom it paid
salaries and payroll taxes as of February 15, 2020. As noted above,
Belovefine actually had no employee payroll between January and April 2020,
because all employees of the footwear business were being paid by GMI.
Belovefine did not file an Employer’s Quarterly Federal Tax Return for the first
quarter of 2020.

h. In Belovefine’s and GMI’s first- and second-draw PPP applications and loan
forgiveness applications, Maroni misrepresented and inflated their total payroll
and employee headcounts, which increased the amount of the PPP loans
received and the amounts forgiven. During the periods covered by the loans,
Maroni repeatedly transferred employees from one entity’s payroll to the
other’s payroll. Maroni included the wages of the employees in both
Belovefine’s and GMI’s PPP loan and forgiveness applications, when in fact
only one entity was paying salaries and payroll taxes to employees of the
footwear business at a given time.

i. Belovefine’s and GMI’s first-draw PPP applications claimed that each business
had 16 employees, and that each business had an average monthly payroll of
$151,825. However, as of April 8, 2020, the date of Belovefine’s first-draw

PPP application, Belovefine had no employees on its payroll. And as of May
7, 2020, the date of GMI’s first-draw PPP application, GMI had no employees
on its payroll because the employees of the footwear business had been
transferred to Belovefine’s payroll. As of May 7, 2020, Belovefine had at
most 13 employees on its payroll, most of whom were on GMI’s payroll at other
times in 2020.

j. Belovefine’s second-draw PPP application, submitted on February 4, 2021,
claimed that Belovefine had 14 employees with an average monthly payroll of
$122,614. GMI’s second-draw PPP application, also submitted on February
4, 2021, claimed that GMI had 20 employees with an average monthly payroll
of $53,531. However, Maroni paid all of the footwear business’s employees
via GMI’s payroll from September 2020 through mid-March 2021. During
that period, GMI had at most 12 employees on its payroll, and Belovefine had
no employees on its payroll.

k. In GMI’s first-draw PPP loan forgiveness application, Maroni falsely certified
that GMI “did not reduce salaries or hourly wages of any employee by more
than 25 percent for any employee during the Covered Period compared to the
most recent quarter before the Covered Period.” In fact, during the covered
period for the forgiveness application, GMI had reduced the salaries of multiple
covered employees by 50% as compared to their pay during the first quarter of
2020, the most recent quarter preceding the relevant covered period. Thus,
Maroni misrepresented and inflated the GMI payroll costs that were eligible for
forgiveness under the first-draw PPP loan.

***

l. As a result of the above-referenced conduct and misrepresentations, Maroni
requested and received PPP loans on behalf of Belovefine and GMI for amounts
substantially in excess of what the footwear business was entitled to receive.

3. Maroni shall pay to the Government within three (3) business days of the Effective

Date (defined below in Paragraph 28) the sum of $1,470,085.65 (the “Settlement Amount”), in

accordance with instructions to be provided by the Financial Litigation Unit of the United States

Attorney’s Office for the Southern District of New York. Of the Settlement Amount,

$735,042.82 constitutes restitution to the United States. Maroni agrees to the entry of a consent

judgment in favor of the United States against Maroni in the amount of the Settlement Amount,

plus interest on the unpaid balance accruing at the rate of 12% per annum, compounded daily from

the date of the entry of judgment, on the remaining unpaid total (principal and interest balance), as

attached hereto as Exhibit A.

4. Maroni agrees that Belovefine and GMI, including any subsidiaries, corporate

predecessors, successors, and assigns, as well as any entities more than 50% owned, or otherwise

controlled, by Maroni, will not participate in any SBA-administered program for a period of five

years from the Effective Date (defined below in Paragraph 28).

5. Maroni agrees to cooperate fully and truthfully with the United States’ investigation

of individuals and entities not released in this Stipulation. Upon reasonable notice, Maroni shall

encourage, and agree not to impair, the cooperation of Belovefine’s and GMI’s directors, officers,

and employees, and shall use his best efforts to make available, and encourage, the cooperation of

former directors, officers, and employees for interviews and testimony, consistent with the rights

and privileges of such individuals. Maroni further agrees to furnish to the United States, upon

request, complete and unredacted copies of all non-privileged documents, reports, memoranda of

interviews, and records in his possession, custody, or control concerning any investigation of the

Covered Conduct that Maroni, Belovefine, and/or GMI have undertaken, or that have been

performed by another on their behalf.

6. Subject to the exceptions in Paragraph 10 (concerning reserved claims) below and

subject to Paragraph 11 (concerning default) and Paragraph 15 (concerning bankruptcy

proceedings) below, and conditioned upon Maroni’s full compliance with the terms of this

Stipulation, including full payment of the Settlement Amount to the United States pursuant to

Paragraph 3 above, the United States releases Maroni from any civil or administrative monetary

claim that the United States has for the Covered Conduct under the FCA, the Civil Monetary

Penalties Law, 42 U.S.C. § 1320a-7a, the Program Fraud Civil Remedies Act, 31 U.S.C. § 3801-

3812, and the common law theories of fraud, payment by mistake, and unjust enrichment. For

avoidance of doubt, this Stipulation does not release any current or former officer, director,

employee, or agent of Belovefine or GMI from liability of any kind, except for Maroni.

7. Maroni fully and finally releases the United States, its agencies, officers,

employees, servants, and agents from any claims (including attorneys’ fees, costs, and expenses

of every kind and however denominated) that Maroni has asserted, could have asserted, or may

assert in the future against the United States, its agencies, officers, employees, servants, or agents

related to the Covered Conduct or the United States’ investigation, prosecution and settlement

thereof.

8. Subject to the exceptions in Paragraph 10 (concerning reserved claims) below and

subject to Paragraph 11 (concerning default) and Paragraph 15 (concerning bankruptcy

proceedings) below, and conditioned on Maroni’s full compliance with the terms of this

Stipulation, including full payment of the Settlement Amount to the United States pursuant to

Paragraph 3 above, Relator, for herself and her heirs, successors, attorneys, agents, and assigns,

releases Maroni from any and all manner of claims, proceedings, liens, and causes of action of any

kind or description that Relator has against Maroni related to or arising from the Relator

Complaint; provided, however, that nothing in this Stipulation shall preclude Relator from seeking

to recover her reasonable expenses and attorneys’ fees and costs pursuant to 31 U.S.C. § 3730(d).

For the avoidance of doubt, Relator does not release any claim that does not arise from or relate to

this Stipulation, the Relator Complaint, or the Government Complaint, including but not limited

to Relator’s claims pending in the action captioned United States ex rel. Taylor v. GMI USA Corp.

et al., 16 Civ. 7216 (RWL) (S.D.N.Y.).

9. In consideration of the execution of this Stipulation by Relator and the Relator’s

release as set forth in Paragraph 8 above, Maroni releases Relator and her heirs, successors,

attorneys, agents, and assigns, from any and all manner of claims, proceedings, liens, and causes

of action of any kind or description that Maroni has against Relator related to or arising from the

Relator Complaint.

10. Notwithstanding the releases given in Paragraph 6 above, or any other term of this

Stipulation, the following claims of the United States are specifically reserved and are not released

by this Stipulation:

a. any liability arising under Title 26, United States Code (Internal

Revenue Code);

b. any criminal liability;

c. except as explicitly stated in this Stipulation, any administrative liability or

enforcement right, including but not limited to the suspension or debarment

rights of any federal agency;

d. any liability to the United States (or its agencies) for any conduct other than the

Covered Conduct;

e. any liability to the United States (or its agencies) or any lender for any portion

of PPP loans that remain due and owing, including but not limited to the portion

of the first-draw PPP loan issued to GMI that has not been forgiven;

f. any liability to the United States (or its agencies) for loans under the Economic

Injury Disaster Loan program;

g. any liability based upon obligations created by this Stipulation; and

h. any liability of individuals, other than Maroni.

11. Maroni shall be in default of this Stipulation if he fails to make the required

payment set forth in Paragraph 3 above on or before the due date for such payment, or if he fails

to comply materially with any other term of this Stipulation that applies to him (“Default”). In

the event of a Default, Maroni agrees that the United States, at its sole discretion, may (i) retain

any payments previously made, rescind this Stipulation, and reinstate the claims asserted against

Defendants in the Government Complaint, or bring any civil and/or administrative claim, action,

or proceeding against Defendants for the claims that would otherwise be covered by the releases

provided in Paragraph 6 above, with any recovery reduced by the amount of any payments

previously made by Defendants to the United States under this Stipulation; (ii) take any action to

enforce this Stipulation in a new action or by reinstating the Government Complaint; (iii) offset

the remaining unpaid balance from any amounts due and owing to Defendants and/or affiliated

companies by any department, agency, or agent of the United States at the time of Default or

subsequently; and/or (iv) exercise any other right granted by law, or under the terms of this

Stipulation, or recognizable at common law or in equity. The United States shall be entitled to

any other rights granted by law or in equity by reason of Default, including referral of this matter

for private collection. In the event the United States pursues a collection action, Maroni agrees

immediately to pay the United States the greater of (i) a ten percent (10%) surcharge of the amount

collected, as allowed by 28 U.S.C. § 3011(a), or (ii) the United States’ reasonable attorneys’ fees

and expenses incurred in such an action. In the event that the United States opts to rescind this

Stipulation pursuant to this Paragraph, Maroni waives and agrees not to plead, argue, or otherwise

raise any defenses of statute of limitations, laches, estoppel or similar theories, to any civil or

administrative claims that (i) are filed by the United States against Defendants within 120 days of

written notification that this Stipulation has been rescinded, and (ii) relate to the Covered Conduct,

except to the extent these defenses were available on March 14, 2023. Maroni agrees not to

contest any offset, recoupment, and/or collection action undertaken by the United States pursuant

to this Paragraph, either administratively or in any state or federal court, except on the grounds of

actual payment to the United States.

12. Maroni, having truthfully admitted to the Admitted Conduct set forth in Paragraph

2 hereof, agree that he shall not, through his attorneys, agents, officers, or employees, make any

public statement, including but not limited to, any statement in a press release, social media forum,

or website, that contradicts or is inconsistent with the Admitted Conduct or suggests that the

Admitted Conduct is not wrongful (a “Contradictory Statement”). Any Contradictory Statement

by Maroni, his attorneys, agents, officers, or employees, shall constitute a violation of this

Stipulation, thereby authorizing the Government to pursue any of the remedies set forth in

Paragraph 11 hereof, or seek other appropriate relief from the Court. Before pursuing any

remedy, the Government shall notify Maroni that it has determined that he has made a

Contradictory Statement. Upon receiving notice from the Government, Maroni may cure the

violation by repudiating the Contradictory Statement in a press release or other public statement

within four business days. If Maroni learns of a potential Contradictory Statement by his

attorneys, agents, officers, or employees, Maroni must notify the Government of the statement

within 24 hours. The decision as to whether any statement constitutes a Contradictory Statement

or will be imputed to Maroni for the purpose of this Stipulation, or whether Maroni adequately

repudiated a Contradictory Statement to cure a violation of this Stipulation, shall be within the sole

discretion of the Government. Consistent with this provision, Maroni may raise defenses and/or

assert affirmative claims or defenses in any proceeding brought by private and/or public parties,

so long as doing so would not contradict or be inconsistent with the Admitted Conduct.

13. Relator and her heirs, successors, attorneys, agents, and assigns shall not object to

this Stipulation. Relator agrees and confirms that the terms of this Stipulation are fair, adequate,

and reasonable under all the circumstances, pursuant to 31 U.S.C. § 3730(c)(2)(B).

14. Maroni waives and shall not assert any defenses he may have to any criminal

prosecution or administrative action relating to the Covered Conduct that may be based in whole

or in part on a contention that, under the Double Jeopardy Clause in the Fifth Amendment of the

Constitution, or under the Excessive Fines Clause in the Eighth Amendment of the Constitution,

this Stipulation bars a remedy sought in such criminal prosecution or administrative action.

15. In exchange for valuable consideration provided in this Stipulation, Maroni

acknowledges the following:

a. Maroni has reviewed his financial situation and warrants that he is solvent

within the meaning of 11 U.S.C. §§ 547(b)(3) and 548(a)(1)(B)(ii)(I) and shall

remain solvent following payment to the United States of the Settlement

Amount.

b. In evaluating whether to execute this Stipulation, the Parties intend that the

mutual promises, covenants, and obligations set forth herein constitute a

contemporaneous exchange for new value given to Maroni, within the meaning

of 11 U.S.C. § 547(c)(1), and the Parties conclude that these mutual promises,

covenants, and obligations do, in fact, constitute such a contemporaneous

exchange.

c. The mutual promises, covenants, and obligations set forth herein are intended

by the Parties to, and do in fact, constitute a reasonably equivalent exchange of

value.

d. The Parties do not intend to hinder, delay, or defraud any entity to which Maroni

was or became indebted on or after the date of any transfer contemplated in this

Stipulation, within the meaning of 11 U.S.C. § 548(a)(1).

e. If Maroni’s obligations under this Stipulation are avoided for any reason

(including but not limited to through the exercise of a trustee’s avoidance

powers under the Bankruptcy Code) or if, before the Settlement Amount is paid

in full, Maroni or a third party commences a case, proceeding, or other action

under any law relating to bankruptcy, insolvency, reorganization, or relief of

debtors seeking any order for relief of Maroni’s debts, or to adjudicate Maroni

as bankrupt or insolvent, or seeking appointment of a receiver, trustee,

custodian, or other similar official for Maroni or for all or any substantial part

of Maroni’s assets:

(1) the United States may rescind the releases in this Stipulation and bring any

civil and/or administrative claim, action, or proceeding against Defendants

for the claims that would otherwise be covered by the releases provided in

Paragraph 6 above;

(2) the United States has an undisputed, noncontingent, and liquidated allowed

claim against Maroni in the amount of $1,470,085.65, less any payments

received pursuant to the Stipulation, provided, however, that such payments

are not otherwise avoided and recovered from the United States by Maroni,

a receiver, trustee, custodian, or other similar official for Maroni; and

(3) if any payments are avoided and recovered by Maroni, a receiver, trustee,

custodian, or similar official for Maroni, Relator shall, within thirty days of

written notice from the United States to the undersigned Relator’s counsel,

return any portions of such payments already paid by the United States to

Relator.

f. Maroni agrees that any civil and/or administrative claim, action, or proceeding

brought by the United States under Paragraph 15(e) above is not subject to an

“automatic stay” pursuant to 11 U.S.C. § 362(a) because it would be an exercise

of the United States’ police and regulatory power. Maroni shall not argue or

otherwise contend that the United States’ claim, action, or proceeding is subject

to an automatic stay and, to the extent necessary, consents to relief from the

automatic stay for cause under 11 U.S.C. § 362(d)(1). Maroni waives and

shall not plead, argue, or otherwise raise any defenses under the theories of

statute of limitations, laches, estoppel, or similar theories, to any such civil or

administrative claim, action, or proceeding brought by the United States within

120 days of written notification to Maroni that the releases have been rescinded

pursuant to this Paragraph, except to the extent such defenses were available on

March 14, 2023.

16. Maroni agrees to the following:

a. Unallowable Costs Defined: All costs (as defined in the Federal Acquisition

Regulation, 48 C.F.R. § 31.205-47) incurred by or on behalf of Maroni, GMI

and Belovefine, and their present or former officers, directors, employees,

shareholders, and agents in connection with:

(1) the matters covered by this Stipulation;

(2) the United States’ audit(s) and civil investigation(s) of the matters covered

by this Stipulation;

(3) The investigation, defense, and corrective actions undertaken in response to

the United States’ audit(s) and civil investigation(s) in connection with the

matters covered by this Stipulation (including attorney’s fees);

(4) the negotiation and performance of this Stipulation;

(5) the payment Maroni makes to the United States pursuant to this Stipulation

and any payments that Maroni may make to Relator, including costs and

attorneys’ fees,

are unallowable costs for government contracting purposes (hereinafter referred to

as Unallowable Costs).

b. Future Treatment of Unallowable Costs: Unallowable Costs will be

separately determined and accounted for by Maroni, GMI, and Belovefine, and

they shall not charge such Unallowable Costs directly or indirectly to any

contract with the United States.

c. Treatment of Unallowable Costs Previously Submitted for Payment: Within 90

days of the Effective Date of this Stipulation, Maroni shall identify and repay

by adjustment to future claims for payment or otherwise any Unallowable Costs

included in payments previously sought by Maroni, GMI and Belovefine, or

any of their subsidiaries or affiliates from the United States. Maroni agrees

that the United States, at a minimum, shall be entitled to recoup from Maroni,

GMI, and Belovefine any overpayment plus applicable interest and penalties as

a result of the inclusion of such Unallowable Costs on previously submitted

requests for payment. The United States, including the Department of Justice

and/or the affected agencies, reserves its rights to audit, examine, or re-examine

the books and records of Maroni, GMI, and Belovefine and to disagree with any

calculations submitted by them or any of their subsidiaries or affiliates

regarding any Unallowable Costs included in payments previously sought by

them, or the effect of any such Unallowable Costs on the amount of such

payments.

17. This Stipulation is intended to be for the benefit of the Parties only. The Parties

do not release any claims against any other person or entity except as otherwise provided herein.

18. Each Party shall bear its own legal and other costs incurred in connection with this

matter, including the preparation and performance of this Stipulation; provided, however, nothing

in this Stipulation shall preclude Relator from seeking to recover her expenses or attorneys’ fees

and costs from Maroni, pursuant to 31 U.S.C. § 3730(d).

19. Any failure by the Government to insist upon the full or material performance of

any of the provisions of this Stipulation shall not be deemed a waiver of any of the provisions

hereof, and the Government, notwithstanding that failure, shall have the right thereafter to insist

upon the full or material performance of any and all of the provisions of this Stipulation.

20. This Stipulation is governed by the laws of the United States. The exclusive

jurisdiction and venue for any dispute relating to this Stipulation is the United States District Court

for the Southern District of New York.

21. For purposes of construing this Stipulation, this Stipulation shall be deemed to have

been drafted by all Parties to this Stipulation and shall not, therefore, be construed against any

Party for that reason in any subsequent dispute.

22. This Stipulation constitutes the complete agreement between the Parties with

respect to the subject matter hereof. This Stipulation may not be amended except by written

consent of the Parties. No prior agreements, oral representations, or statements shall be

considered part of this Stipulation.

23. The undersigned counsel and other signatories represent and warrant that they are

fully authorized to execute this Stipulation on behalf of the persons and the entities indicated

below.

24. This Stipulation is binding on Maroni’s successors, transferees, heirs, and assigns.

25. This Stipulation is binding on Relator’s successors, transferees, heirs, and assigns.

26. This Stipulation may be executed in counterparts, each of which constitutes an

original and all of which constitute one and the same Stipulation. Signatures in PDF form or

facsimiles of signatures shall constitute acceptable, binding signatures for purposes of this

Stipulation.

27. Any notice pursuant to this Stipulation shall be in writing and shall, unless

expressly provided otherwise herein, be delivered by hand, express courier, or e-mail transmission

followed by postage-prepaid mail, and shall be addressed as follows:

TO THE UNITED STATES:

Samuel Dolinger
Assistant United States Attorney
United States Attorney’s Office
Southern District of New York
86 Chambers Street, 3rd Floor
New York, New York 10007
[email protected]

TO DEFENDANT STEFANO MARONI:

Michael D. Longyear
Lankler Siffert & Wohl LLP
1185 Avenue of the Americas, 31st Floor
New York, New York 10036
[email protected]

TO RELATOR:

Timothy J. McInnis
McInnis Law
521 5th Avenue, 17th Floor
New York, New York 10175
[email protected]

28. The effective date of this Stipulation is the date upon which the Stipulation is

approved by the Court (the “Effective Date”).

[Remainder of page intentionally left blank]

RELATOR DEVYN TAYLOR

Dated: December ___, 2024

By:
Devyn Taylor

Relator

Dated: December ___, 2024

McINNIS LAW

Attorney for Relator Devyn Taylor

By:

Timothy J. McInnis
521 5th Avenue, 17th Floor
New York, New York 10175
Tel.: (212) 292-4573
[email protected]

6Exhibit A

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

UNITED STATES OF AMERICA ex rel. DEVYN
TAYLOR,

Plaintiff,

-v-

STEFANO MARONI, GMI USA CORP., and
BELOVEFINE, LTD.,

Defendants.

23 Civ. 2159 (JHR)

CONSENT JUDGMENT

UNITED STATES OF AMERICA,

Plaintiff-Intervenor,

-v-

STEFANO MARONI, GMI USA CORP., and
BELOVEFINE, LTD.,

Defendants.

Upon the consent of plaintiff the United States of America and defendant Stefano

Maroni, it is hereby:

ORDERED, ADJUDGED and DECREED: that plaintiff the United States of America is

awarded judgment in the amount of $1,470,085.65 against Stefano Maroni, as well as post-

judgment interest at the rate of 12% per annum, compounded daily; and it is further

ORDERED, ADJUDGED and DECREED: that in light of the circumstances of this

proceeding, the Court determines in the exercise of its discretion, and in the interests of sound

judicial administration and efficiency, that there is no just reason for delay and directs the entry

of this partial final judgment pursuant to Fed. R. Civ. P. 54(b); and it is further

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