On August 8, the U.S. Department of Justice (DOJ) announced that West Coast Dental Administrative Services LLC and its former owners agreed to pay $6.3 million to resolve allegations of knowingly violating the False Claims Act in connection with improper loans received under the Paycheck Protection Program (PPP).
According to the DOJ, “West Coast Dental and six of its affiliated dental practices received seven improper second draw PPP loans and subsequent forgiveness of these loans based on false certifications that the companies qualified for the loans even though they were ineligible because the dental practices collectively employed more than 300 individuals.”
“PPP loans were intended to support small businesses facing difficult economic times due to the COVID-19 pandemic,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The Justice Department will continue to hold borrowers who improperly received and sought forgiveness of PPP loans accountable for their actions.”
In May 2021, the U.S. Department of Justice (DOJ) announced the establishment of the COVID-19 Fraud Enforcement Task Force. The Task Force aims to “marshal the resources of the Department of Justice in partnership with agencies across government to enhance enforcement efforts against COVID-19 related fraud.”
The settlement stems from a qui tam lawsuit filed by Relator LLC, a limited liability corporation formed by California attorneys Anoush Hakimi and Peter Shahriari. Under the FCA’s qui tam provisions, private citizens and private parties may file lawsuits on behalf of the government if they know of an individual or company defrauding the government. Qui tam whistleblowers are eligible to receive between 15 and 30% of the government’s recovery.
In this case, the whistleblowers are set to receive $507,000.
In July 2023, a bipartisan group of senators introduced the False Claims Amendments Act of 2023, which address a few technical loopholes undermining the success of the FCA. The bill is widely supported by whistleblower advocates.
National Whistleblower Center (NWC) has issued an Action Alert calling on Congress to pass the bill.
Join NWC in Taking Action:
Demand that Congress strengthen the False Claims Act
Further Reading:
Bipartisan Legislation Unveiled to Strengthen False Claims Act