Tsur Jacob Reiss, Defrauding Unemployment Insurance Program, Maryland 2020

Baltimore, MD – A local business owner has agreed to pay $1.25 million to resolve allegations he caused the submission of false unemployment insurance claims at the beginning of the COVID-19 pandemic.

Potomac Floral Wholesale, Inc. and its owner, Tsur ‘Jacob’ Reiss, allegedly instructed employees to apply for unemployment benefits while continuing to work without pay. The company and Reiss are accused of violating the False Claims Act for causing the submission of false UI claims.

According to the settlement agreement, from March 1, 2020 to December 31, 2020, Potomac Floral and Reiss instructed a group of employees to apply for UI benefits. However, they also instructed these employees to continue working for Potomac Floral without pay. This conduct caused the submission of false UI claims in violation of the False Claims Act.

U.S. Attorney Erek L. Barron praised the National Capital Region, U.S. Department of Labor – Office of Inspector General (DOL-OIG) for its work in the investigation. Barron thanked Assistant U.S. Attorney Matt Haven who handled the case.

The whistleblower provision of the False Claims Act, filed by Travis Gabriel, allowed him to receive a portion of the recovery. As part of the civil resolution, Gabriel will receive $243,750.00. The claims resolved by this settlement are allegations, and the settlement is not an admission of liability by Potomac Floral or Tsur Reiss.

The U.S. Attorney’s Office for the District of Maryland, the DOL-OIG, and the Maryland Attorney General’s Office announced the settlement. The agreement demonstrates the strong commitment to holding accountable those who seek to unlawfully exploit the unemployment insurance program at the expense of those who actually need it.

Erek L. Barron, U.S. Attorney for the District of Maryland, stated, ‘Attempting to unjustly profit from a global pandemic is absolutely wrong.’ Barron added, ‘Unemployment insurance is meant for employees who need it when they are laid off from their jobs. During the early stages of COVID-19, the Federal Pandemic Unemployment Compensation program was designed to supplement traditional unemployment insurance for employees laid off during an unprecedented global emergency.’

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