E. Martin Estrada, U.S. Attorney | U.S. Attorney's Office for the Central District of California
Torrance-based Unified Care Services LLC, along with its affiliates and owner Emmanual David, has agreed to pay $18 million to settle allegations of violating the False Claims Act. The Justice Department announced that the company provided false information in Paycheck Protection Program (PPP) loan applications and forgiveness requests.
The PPP was established by Congress in March 2020 under the CARES Act to support small businesses during the COVID-19 pandemic. Businesses could seek loan forgiveness if they used funds for payroll and other eligible expenses. Eligibility was determined based on employee count, revenue, or net worth, including all corporate affiliates under common control.
Unified Care allegedly certified falsely that it had fewer than 500 employees when applying for PPP loans in 2020. It reportedly did not disclose that it was part of a larger chain of facilities sharing common ownership, making it 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 settlement involves several Unified Care affiliates including 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.”
Mandy Riedel from the Justice Department emphasized accountability for improper acquisition of federally guaranteed PPP loans: “This resolution demonstrates the department’s commitment to ensuring that those who improperly obtain federally guaranteed PPP loans are held accountable and funds repaid to the American taxpayer.”
Weston King from SBA Office of Inspector General added: “Through partnerships with federal agencies, we continue to identify fraud schemes and protect relief funds from misuse.”
The settlement resolves a lawsuit filed under qui tam provisions of the False Claims Act, allowing private parties to sue on behalf of the U.S. The whistleblower involved will receive $2,070,000 from this settlement.
The case was handled by 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 the Attorney General to enhance efforts against pandemic-related fraud through collaboration across federal agencies.
Complaints about potential COVID-19 relief fraud can be reported via various channels provided by the Justice Department.
It is important to note that these claims are allegations only; there has been no determination of liability.