Qui Tam Attorney for David Einhorn's Greenlight Capital Hedge Fund Says Today's $26.3 Million Whistleblower Settlement With Allied Capital is at Least $100 Million Less Than Taxpayers Should Have Received

VENICE, Calif., May 5 /PRNewswire/ -- The whistleblower attorney who represents David Einhorn's Greenlight Capital hedge fund and has helped qui tam whistleblowers return more than a half-billion dollars to taxpayers, criticized today's $26.3 million federal False Claims Act settlement with Allied Capital Corporation's Business Loan Express as, "not close to what the Government should have recovered."

"It's more than $100 million short of what taxpayers should have gotten back from Allied Capital Corporation's fraudulent Small Business Administration ("SBA") coast-to-coast lending practices," said Mark Allen Kleiman, Esq., who has represented whistleblowers across the U.S. in healthcare, defense contracting, higher education, and other sector qui tam cases brought under federal and state False Claims Acts.

REPORTERS /EDITORS: The complete, six-page news release for this settlement can be found at http://www.quitamspecialist.com and http://www.PRforLAW.com. To obtain the unredacted SBA Inspector General's Report 7-28 in which previously censored content has been highlighted for your convenience speak with Mark Kleiman at 310-306-8094.

Kleiman filed the Greenlight Capital, Inc. ("Greenlight") allegations against Allied Capital Corporation ("ALD"), two ALD entities and three ALD executives (including a former SEC Enforcement Division staffer) under seal in December 2004 as required by federal law. A Complaint was unsealed with today's settlement announced by the U.S. Attorney's Office for the Northern District of Georgia.

Greenlight's False Claims Act ("FCA") filing came more than two years after ALD launched a bizarre, vindictive multi-year series of attacks against Einhorn, after he told a May 2002 charity event that ALD was highly overvalued.

ALD first used its political connections and retained former U.S. Securities and Exchange Commission ("SEC") officials to persuade the agency to instead investigate Einhorn, according to a highly critical and censored SEC Inspector General's January 2010 report, OIG-496.

"ALD should not have been able to use the SEC as its private attack dog against David Einhorn," Kleiman said, calling for the entire IG report to be released uncensored so taxpayers and the investing public can see exactly what was going on. "It's frightening how political influence at the SEC enabled ALD to become Einhorn's accuser and deflect the investigation away from its own valuation practices.

"And transparency continues to elude the SEC," Kleiman said. "Who at the SEC continues to protect whom when the public has a right to know?" On April 20 Kleiman filed a Freedom of Information Act ("FOIA") Request regarding the Jan. 10, 2010 OIG report. "Why is this censored Allied SEC report, OIG-496 unavailable from the SEC's Web site, while the censored Stanford report, OIG-526, issued more than two months later, on March 31, 2010, is posted and available at http://www.sec.gov/news/studies/2010/oig-526.pdf?"

Kleiman also criticized the SBA, which, "for its part had ceded approval authority allowing BLX unfettered authority to obligate taxpayers to guarantee 75 to 80 percent of the loans BLX gave out," Kleiman said.

"Knowing the understaffed SBA was hell-bent to issue more and more businesses loans and would ignore all the obvious red flags, BLX originated fraudulent loans and flouted SBA regulations," Kleiman said, referring to his uncensored copy of the SBA Inspector General's Report 7-28. In what was believed to be a highly unusual government first, the SBA issued the report after ordering it to be heavily redacted. "It was censored solely to protect the SBA's kid gloves treatment of Allied," Kleiman said.

According to the unredacted version of the report in Kleiman's possession, "Since 2001, SBA's oversight activities have identified recurring and material issues related to BLX's performance, credit administration, asset quality, and compliance with SBA regulations."

"Four years before Greenlight blew the whistle on BLX the SBA and the SEC could together have saved taxpayers hundreds of millions by shutting down BLX," Kleiman said. "But neither agency did the right thing."

BLX and ALD, which recently was purchased by another public entity, previously have denied wrongdoing.

UNITED STATES OF AMERICA, ex rel. JAMES R. BRICKMAN and GREENLIGHT CAPITAL, INC., Plaintiff, v. ALLIED CAPITAL CORPORATION; CIENA CAPITAL, LLC, f/k/a BUSINESS LOAN EXPRESS, LLC, f/k/a BUSINESS LOAN EXPRESS, INC.; BUSINESS LOAN CENTER, LLC, f/k/a BUSINESS LOAN CENTER, INC.; WILLIAM WALTON; JOAN SWEENEY; ROBERT TANNENHAUSER; PATRICK HARRINGTON; and Does 1-100, Defendants. United States Court for the Northern District of Georgia, Atlanta Division, Civil Action No. 1:04-cv-3789-TWT.

SOURCE PRforLAW, LLC