Carson Tahoe Health System has agreed to pay $8,876,475.45 to settle allegations related to Paycheck Protection Program (PPP) loans, as announced by Acting U.S. Attorney Michele Beckwith. The health system, which includes Carson Tahoe Physician Clinics and Carson Tahoe Continuing Care Hospital, was accused of obtaining PPP loans despite being ineligible due to exceeding size limitations under the Small Business Administration's affiliation rules.
The PPP was established in March 2020 through the Coronavirus Aid, Relief, and Economic Security Act to support small businesses during the COVID-19 pandemic. However, the United States contends that Carson Tahoe Health System did not meet eligibility requirements for these loans.
In May 2020, Carson Tahoe entities received a total of $5,077,011 in PPP loan disbursements. These loans were later forgiven by the Small Business Administration (SBA). In February 2021, another $2 million loan was secured by Carson Tahoe Physician Clinics and subsequently forgiven after a request made in September 2021. Overall, this resulted in $7,267,009 paid out by the United States government.
“This settlement returns millions of taxpayer dollars to the government and reflects our ongoing commitment to enforce the requirements of the Paycheck Protection Program and ensure that only eligible businesses received this critical pandemic relief,” stated Acting U.S. Attorney Beckwith.
Wendell Davis from SBA’s General Counsel commented on the resolution: “The favorable settlement in this case is the product of enhanced efforts by federal agencies such as the Small Business Administration working with the U.S. Attorney’s Office and SBA’s Office of Inspector General to pursue recovery from those who obtained essential government program funds when they were ineligible to do so.”
This agreement originated from a lawsuit filed under qui tam provisions of the False Claims Act by a whistleblower who will receive a share of any recovery from this settlement.
Assistant U.S. Attorney Tara Amin handled this matter for California's Eastern District. It should be noted that these are allegations only; no liability has been determined.
For those with information regarding attempted fraud involving COVID-19 relief programs can report it via phone or online through channels provided by the Department of Justice's National Center for Disaster Fraud.