Relator, LLC v. Ilink Employers Company

• Court: Court of Appeals for the Ninth Circuit
• Decided: November 3, 2025
• Docket: 24-5636
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS NOV 3 2025 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

United States of America ex. rel. No. 24-5636 RELATOR, LLC, a California limited D.C. No. liability company, 5:22-cv-01004-RGK-DTB Plaintiff - Appellant, MEMORANDUM* and

UNITED STATES OF AMERICA,

Plaintiff - Appellee,

v.

ILINK EMPLOYERS COMPANY, a Delaware corporation; ILINK BUSINESS MANAGEMENT, INC.; and ALVARO GABRIEL AYALA,

Defendants - Appellees.

Appeal from the United States District Court for the Central District of California R. Gary Klausner, District Judge, Presiding

Argued and Submitted October 10, 2025 Pasadena, California

Before: RAWLINSON, MILLER, and JOHNSTONE, Circuit Judges.

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. Plaintiff Relator, LLC appeals the district court’s dismissal with prejudice of

its action against Defendants iLink Employers Company and iLink Business

Management, Inc. (together, “iLink companies”), and Alvaro Gabriel Ayala, CEO

of the iLink companies. In its First Amended Complaint, Relator alleged that

Defendants violated the False Claims Act (“FCA”), 31 U.S.C. § 3729(a)(1)(A)–

(B), by knowingly making false statements and submitting false certifications on

federal Paycheck Protection Program (“PPP”) loan applications. We have

jurisdiction pursuant to 28 U.S.C. § 1291. We reverse and remand for the district

court to consider the remaining elements of Relator’s FCA claim.

“We review de novo both a dismissal for failure to allege facts of fraud with

particularity, and a dismissal for failure to state a claim pursuant to Federal Rule of

Civil Procedure 12(b)(6).” United States ex rel. Lee v. SmithKline Beecham, Inc.,

245 F.3d 1048, 1051 (9th Cir. 2001) (citations omitted). To state a claim under the

FCA, Relator must “state with particularity the circumstances constituting fraud or

mistake.” Fed. R. Civ. P. 9(b); SmithKline Beecham, 245 F.3d at 1051. “To meet

this standard, [a plaintiff’s] complaint must ‘identify the who, what, when, where,

and how of the misconduct charged, as well as what is false or misleading about

the purportedly fraudulent statement, and why it is false.’” Salameh v. Tarsadia

Hotel, 726 F.3d 1124, 1133 (9th Cir. 2013) (quoting Cafasso v. Gen. Dynamics C4

Sys., Inc., 637 F.3d 1047, 1055 (9th Cir. 2011)). A plaintiff must also meet the

2 24-5636 plausibility pleading standard. See Cafasso, 637 F.3d at 1055; Bell Atl. Corp. v.

Twombly, 550 U.S. 544, 556 (2007) (The pleading must state “enough fact[s] to

raise a reasonable expectation that discovery will reveal evidence of [the

misconduct alleged].”). Relator’s First Amended Complaint plausibly alleges with

particularity that Defendants falsely certified certain statements in their PPP loan

applications to seek and obtain a loan for significantly more payroll than

Defendants actually had.

Relator has alleged most of the facts required to state a claim with

particularity: who: the iLink companies and Ayala; what and how: falsely stated in

PPP loan applications that the iLink companies had hundreds of employees and

needed over $6 million in loans for payroll; when: sometime between April and

May 2020; and where: California and Delaware.

It is a closer question whether Relator has stated with particularity facts

plausibly suggesting why Defendants’ statements were false or misleading, but

Relator has alleged enough here to plead falsity at the motion to dismiss stage.

Relator plausibly alleged that iLink Employers falsely stated it was in-operation in

February 2020. According to the complaint, iLink Employers was not in operation

in February 2020 because it did not register to do business in California until July

2020, and, because its designated place of business was California, it could not

have been in operation in any other jurisdiction. Relator also plausibly alleged that

3 24-5636 Defendants made false certifications in the PPP loan applications about needing the

loans to support operations, using the loans to cover employee payroll, and

applying for only one loan. According to the complaint, the iLink companies did

not need the PPP loans to cover payroll because the claimed employees were paid

by clients to whom they referred those employees, Ayala used the proceeds to buy

real estate, not to cover payroll, and the iLink companies were essentially one

company run by Ayala split into two for the sole purpose of obtaining PPP loans.

Relator also plausibly alleged that iLink Business falsely certified it would not use

its PPP loan to cover portions of employees’ annual salaries over the $100,000

salary limit.

Based on Relator’s allegations discussed above, Relator also plausibly

alleged that Defendants falsely certified that information in their applications was

“true and accurate in all material aspects,” they “underst[ood]” the statements in

the applications, and were eligible to apply for and receive PPP loans. Because

Relator pleaded falsity with sufficient particularity, we reverse the district court’s

order granting Defendants’ motion to dismiss and remand for the district court to

consider the remaining elements of Relator’s FCA claim.

REVERSED and REMANDED.1

1 Relator’s motion for judicial notice, Dkt. 12, and Defendants’ motion for judicial notice, Dkt. 19, are DENIED.

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