Carson City, Nev.-based Carson Tahoe Health System has agreed to pay nearly $8.9 million to settle allegations that it improperly obtained four Paycheck Protection Program loans for which it was not eligible.
Five things to know:
1. The PPP, created in March 2020 as part of the Coronavirus Aid, Relief, and Economic Security Act, was designed to provide financial relief to small businesses facing economic challenges during the COVID-19 pandemic. To qualify for funding, businesses were required to meet eligibility requirements, including size limitations that accounted for affiliated entities.
2. Federal authorities argue that Carson Tahoe Health and its affiliates exceeded the Small Business Administration’s size limitations and were therefore ineligible for PPP funding.
3. In May 2020, Carson Tahoe Health, Carson Tahoe Physician Clinics and Carson Tahoe Continuing Care Hospital received more than $5 million in PPP loan disbursements. The SBA later approved forgiveness for these loans. In February 2021, Carson Tahoe Physician Clinics secured a second PPP loan for $2 million, which was also forgiven after a loan forgiveness request in September 2021. In total, the U.S. government disbursed $7,267,009 in forgiven principal, interest, and lender fees for the four loans.
4. The settlement originated from a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act. As part of the settlement, the relator involved in this case will receive a percentage of the recovered funds.
5. While Carson Tahoe Health agreed to the settlement, the claims resolved are allegations only, and no determination of liability has been made.
