Torrance-based Unified Care Services LLC, along with its affiliates and owner Emmanual David, has agreed to pay $18 million. This settlement resolves allegations of False Claims Act violations related to the Paycheck Protection Program (PPP) loans during the COVID-19 pandemic, as announced by the Justice Department.
The PPP was established in March 2020 under the CARES Act to support small businesses struggling during the pandemic. Businesses could apply for loan forgiveness if they used funds for employee payroll and other eligible expenses. Eligibility was based on business size, determined by employees, revenues, or net worth.
Unified Care and its affiliates were accused of falsely certifying themselves as small businesses with fewer than 500 employees when applying for PPP loans in 2020. The applications allegedly omitted information about being part of a larger chain under common ownership and control, making them ineligible for these loans.
"COVID-relief programs were designed to help people and businesses during the worst public health crisis this nation had seen in one century," stated United States Attorney Martin Estrada. "My office will continue to pursue those who knowingly cheat taxpayers by violating PPP and other pandemic-related programs."
The affiliates involved include several entities such as Casa Montana LLC, Geri-Care Inc., Pacific Palms Healthcare LLC, among others.
“PPP loans were intended to assist eligible small businesses during the pandemic,” said Principal Deputy Assistant Attorney General Brian M. Boynton. “When ineligible businesses improperly obtained loans, they harmed both the taxpayers who funded the program and the eligible businesses who were denied relief.”
Director Mandy Riedel of COVID-19 Fraud Enforcement emphasized that this resolution underscores accountability for improper acquisition of federally guaranteed PPP loans.
Special Agent Weston King from SBA Office of Inspector General expressed commitment to maintaining integrity within CARES Act programs through federal partnerships aimed at identifying fraud schemes.
This settlement also resolved a qui tam lawsuit filed under False Claims Act provisions allowing private parties to sue on behalf of the U.S., sharing government recovery proceeds. The whistleblower will receive $2,070,000 from this settlement.
Efforts leading up to this resolution involved coordination between various divisions within the Justice Department alongside assistance from SBA's legal offices.
In May 2021, a COVID-19 Fraud Enforcement Task Force was created by Attorney General Merrick Garland focusing on combating pandemic-related fraud through enhanced investigation efforts across domestic and international fronts while aiding agencies administering relief programs against fraudulent activities.
For further information regarding potential fraud affecting COVID-19 relief programs or reporting attempts at fraudulence involving these measures can be directed via specified channels provided by respective authorities online or through designated hotlines mentioned above.
It is important to note that claims settled are mere allegations without any determination regarding liability having been made yet.