On March 24, Acting Attorney Michele Beckwith announced that Carson Tahoe Health Systems agreed to pay $8,876,475.45 to settle allegations that they violated the False Claims Act (FCA) as they were not eligible for the four loans they received through the Paycheck Protection Program (PPP). Tahoe Health Systems also owns Carson Tahoe Physician Clinics and Carson Tahoe Continuing Care Hospital.
Carson Tahoe Health Systems applied for and received Paycheck Protection Program loans (PPP). This was a part of the Coronavirus Aid, Relief, and Economic Security Act from March 2020 that protected small businesses struggling with economic hardship during the COVID-19 pandemic through the Small Business Administration (SBA). The United States alleges that they were ineligible through SBA rules that require businesses to account for any affiliated entities, which Carson Tahoe Health Systems allegedly left out. They cannot receive PPP loans, as their business allegedly exceeds the size limitations in the SBA requirements.
According to the government, in May 2020, Carson Tahoe Health Systems and their two affiliate companies each received PPP loans totaling $5,077,011 in disbursements. The SBA forgave these loans after receiving loan forgiveness applications. In February 2021, Carson Tahoe Physician Clinics applied for a second PPP loan of $2 million that was also forgiven. In total, the United States paid $7,267,009 to these companies including forgiven loan principal, interest and lenders fees.
Acting U.S. Attorney Beckwith said “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.”
This case was brought from a whistleblower under the qui tam provisions of the False Claims Act, allowing private parties to file suits on behalf of the government if they know a company is defrauding the government. Qui tam whistleblowers are eligible to receive a portion between 15 and 30% of the government’s recovery.
During FY 2024, settlements and judgments under the False Claims Act exceeded $2.9 billion and over $2.4 billion of the recoveries stemmed from qui tam whistleblower lawsuits. Furthermore, according to the government, a record 979 qui tam lawsuits were filed in FY 2024.
However, in September 2024, a district judge in Florida ruled that the False Claims Act’s qui tam provisions were unconstitutional. The U.S. federal government is urging the U.S. Court of Appeals for the Eleventh Circuit to reverse that decision, stating in a brief that “other than the district court here, every court to have addressed the constitutionality of the False Claims Act’s qui tam provisions has upheld them.”
National Whistleblower Center has issued an Action Alert allowing whistleblower supporters to write the members of Congress urging them to protect and strengthen and protect the False Claims Act.
The claims asserted in this case are allegations only, and there has been no determination of liability.
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Strengthen the False Claims Act and Protect it From Attack
