An Illinois federal judge has dismissed a $36 million whistleblower lawsuit brought by Michigan law firm Akeel & Valentine PLC against Napleton Auto Group and dozens of its dealerships, ruling that the firm’s allegations of Paycheck Protection Program (PPP) loan fraud were based on information already in the public domain.

The case accused the Napleton dealerships of defrauding the U.S. government during the COVID-19 pandemic by securing forgivable PPP loans while allegedly concealing a felony charge against Edward W. Napleton Jr., a senior associate tied to the company.

But U.S. District Judge Sunil R. Harjani found that key details — including Napleton’s criminal charge and his managerial role — were publicly accessible through government databases and media reports, triggering the False Claims Act’s public disclosure bar, which blocks whistleblower suits based on already-known information.

Public Information Sinks Whistleblower Claim

Judge Harjani ruled that Akeel & Valentine had no firsthand or independent evidence that revealed new or material information about the alleged fraud.

“Relator has no direct or firsthand knowledge that could constitute new and material information necessary to uncovering fraud,” the judge wrote, adding that the firm’s filing lacked the original source status required under the law.

The court pointed to a 2019 Florida news article that detailed Napleton’s sexual battery charge and his oversight of roughly 75 franchised dealerships — a number that included all the defendants named in the case.

“That is substantially similar to relator's allegations that he was ‘put in charge of overseeing the dealerships on a national scale,’” Judge Harjani noted.

Door Left Open for Amendment

Despite dismissing the complaint, the judge declined to throw out the case with prejudice, granting Akeel & Valentine until Nov. 11 to submit an amended filing that provides genuinely new and material information.

“Though it may be futile for relator to become an original source, it is not futile for relator to obtain genuinely new and material information,” Harjani wrote, leaving a narrow window for the firm to revive the case.

Filed in January 2024, the suit named Napleton Auto Group, multiple individuals, and about three dozen dealerships spanning Illinois, Indiana, Florida, Georgia, Minnesota, Missouri, Pennsylvania, and Wisconsin.

The U.S. government declined to intervene, leaving the law firm to press ahead alone.

Akeel & Valentine is represented by Samuel R. Simkins and Shereef H. Akeel, along with David J. Chizewer and Joseph L. Hoolihan of Goldberg Kohn Ltd.

The defendants are represented by Crowell & Moring LLP, including attorneys Jason M. Crawford, Katherine Quinn, Neil G. Nandi, and Olivia L. Lynch.