You can be on Entrepreneur’s cover!

The CEO of a Company That Owns More Than 100 Wendy's Allegedly Used $1 Million in PPP Loans on a New House in Montana Sandi Adler, a former vice president at Starboard, claims she was fired after taking issue with CEO Andrew Levy's plans to "defraud the United States and the Small Business Association."

By Kate Taylor

entrepreneur daily
Erin McDowell/Business Insider
The CEO of a major Wendy's franchisee used funds meant to keep workers employed to fund a newly-purchased home, according to a lawsuit from a former vice president at the company.

The CEO of a major Wendy's franchisee used funds meant to keep workers employed to fund a newly purchased home, according to a lawsuit from a former vice president at the company.

On June 30, The Starboard Group's former vice president of legal affairs and human resources, Sandi Adler, filed a lawsuit against Starboard, as well as CEO Andrew Levy and officer Kevin Holbrook. Starboard is a major Wendy's franchisee based in Florida that runs 101 locations of the fast-food chain in seven states, according to the company's website.

According to Adler's complaint, Starboard received roughly $9 million in Paycheck Protection Program (PPP) loans. Government records show that numerous Starboard entities based in Branson, Montana and Coral Springs, Florida, received loans in the range of $150,000 to $2 million.

CEO Levy diverted roughly $1 million in funds to finance a recently purchased house in Montana, according to the complaint. (Business Insider found that a company created by Levy and Heather Levy owns several parcels of land in Livingston, Montana.)

Related: SBA and Treasury Release Names of PPP Loan Recipients

"Levy directed Adler to place certain personal employees in Montana as corporate employees," the complaint says. "The effect of this, in view of the PPP funding, was to defraud the United States and the Small Business Association."

Adler says in the complaint that Levy told her to tell creditors, landlords, vendors and suppliers that the company had not received PPP funding and therefore could not meet its financial obligations. When Adler complained about Levy's orders to Holbrook, her superior at the company, she says he fired her.

The complaint also alleges that Holbrook sexually harassed Adler, including describing oral sex, saying he liked big breasts and pressing Alder to go on vacation with him to Europe. According to the complaint, Adler told Levy in late fall she objected to Holbrook's advances. Adler says Levy responded: "Why don't you guys just f--- already and get it over with?"

Wendy's did not immediately respond to Business Insider's request for comment. Starboard said in a statement that Adler's allegations were "false and hurtful," and that the decision to terminate Adler "was not made in haste or without reason."

"With regard to our handling of PPP dollars, our financial records are clear and complete and will refute any claim of misuse," Starboard said in the statement.

"More troubling, however, is the accusation of sexual harassment. Despite an initial desire to simply view this as being the words of a disgruntled former employee, we must take all accusations of this nature seriously and, as such and in accordance with our corporate policy, have launched an independent, internal investigation," the statement continues. "In order to protect the privacy of those involved and to preserve all legal recourse at our disposal moving forward, we will have no further public comment on this issue at this time."

Related: How to Navigate the Volatile Business-Funding Environment

This week, the SBA released information about companies that received $150,000 or more in PPP loans. A number of franchisees applied for loans, as did a few major chains such as P.F. Chang's and TGI Friday's.

In April, chains such as Shake Shack and Sweetgreen returned PPP loans after facing backlash when the first round of funds ran out. However, with $134 billion left in unused loans, neither P.F. Chang's nor TGI Friday's has hinted at prematurely returning the funds.

Kate Taylor

Reporter

Kate Taylor is a reporter at Business Insider. She was previously a reporter at Entrepreneur. Get in touch with tips and feedback on Twitter at @Kate_H_Taylor. 

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Side Hustle

He Took His Side Hustle Full-Time After Being Laid Off From Meta in 2023 — Now He Earns About $200,000 a Year: 'Sweet, Sweet Irony'

When Scott Goodfriend moved from Los Angeles to New York City, he became "obsessed" with the city's culinary offerings — and saw a business opportunity.

Marketing

I Got Over 225,000 Views in Just 3 Months With Short-Form Video — Here's Why It's the New Era of Marketing

Thanks to our new short-form video content strategy, we've amassed over 225,000 video views in just three months. Learn how to increase brand awareness through short-form video content.

Branding

94% of Customers Say a Bad Review Made Them Avoid Buying From a Brand. Try These 4 Techniques to Protect Your Brand Reputation.

Maintaining a good reputation is key for any business today. With so many people's lives and shopping happening online, what is said about a company on the internet can greatly influence its success.

Personal Finance

How to Get a Lifetime of Investing Experience in Only One Year

Plus, how day traders can learn a lesson from pilots.

Productivity

6 Habits That Help Successful People Maximize Their Time

There aren't enough hours in the day, but these tips will make them feel slightly more productive.

Growing a Business

Looking to Achieve Your Goals But Don't Know Where to Start? Try These Proven Goal-Setting Strategies.

Find a more effective way of creating – and achieving – your goals. Get clear on your vision, make your plan, take action, reassess and then revise.