Michele Beckwith Acting U.S. Attorney | U.S. Attorney for the Eastern District of California
Carson Tahoe Health System has agreed to pay over $8.8 million to settle allegations regarding their eligibility for Paycheck Protection Program (PPP) loans. The announcement was made by Acting U.S. Attorney Michele Beckwith.
The PPP was established in March 2020 under the Coronavirus Aid, Relief, and Economic Security Act to assist small businesses during the COVID-19 pandemic. To qualify, businesses needed to meet specific eligibility criteria, including size limitations based on affiliated entities. The United States claims that Carson Tahoe Health System and its affiliates were not eligible due to exceeding these size limits.
In May 2020, Carson Tahoe Health System and its associated clinics received a total of $5,077,011 in PPP loans. These loans were later forgiven by the Small Business Administration (SBA). In February 2021, an additional $2 million loan was granted to Carson Tahoe Physician Clinics and subsequently forgiven in September 2021. Overall, the government paid $7,267,009 in forgiven loan principal and interest as well as lender fees.
Acting U.S. Attorney Beckwith emphasized the importance of this settlement: “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.”
Wendell Davis from SBA's General Counsel remarked on the cooperation between federal agencies: “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.”
The allegations originated from a whistleblower lawsuit filed under the False Claims Act's qui tam provisions. This allows private individuals to sue on behalf of the government and potentially share in any recovery obtained.
Assistant U.S. Attorney Tara Amin handled this matter for California's Eastern District. It is important to note that these resolved claims are merely allegations with no determination of liability made.
For those with information about potential fraud related to COVID-19 programs, reports can be made through the Department of Justice’s National Center for Disaster Fraud Hotline or via their web complaint form.
