During the COVID-19 pandemic, under the Paycheck Protection Program (PPP), businesses were eligible for emergency loans and loan forgiveness if they were small businesses with fewer than 500 employees. The U.S. Attorney for the Central District of California announced that Unified Care and its affiliates violated the False Claims Act when they “falsely certified they were small business with fewer than 500 employees” and their PPP “applications allegedly failed to disclose that the entities applying were part of a larger chain of facilities that all shared common ownership and control that rendered Unified Care and its affiliates ineligible for PPP loans.” Unified Care will pay $18 million back to the Federal Government.
A whistleblower, who filed a lawsuit under the False Claims Act, United States ex rel. Ashwani Chawla v. Unified Care Services, et al., CV 21-5939-GW (CDCA), will receive $2,070,000 in connection with the settlement.
Were other nursing home chains similarly ineligible to receive PPP funds?
The Small Business Administration administered the PPP program and appears to report that 15,141 nursing facilities (every nursing home in the country?) received PPP loans totaling $6.8 billion and averaging $448,255 per facility. The SBA website identifies every nursing facility that received PPF funds, with the amount received in PPP funds and the number of jobs reported. The website reports the facilities in descending order, with those receiving the highest PPP amount ($10,000,000) listed first.
For further information, see:
- PPP is section 1102 of the Coronavirus Aid, Relief and Economic Security Act, Public Law 116-136. 15 U.S.C. 636(a)(2)(F)(36))
- U.S. Attorney, Central District of California, “South Bay-Based Nursing Facilities Chain and Owner Agree to Pay $18 Million to Resolve COVID-Related False Claims Act Allegations” (Press Release, Jan. 17, 2025), Settlement ¶F, describing 13 loans made to defendants and reciting that “Defendants were too large to qualify for any PPP loan because, when considered collectively as required by the relevant rule and regulations given their affiliations based on common ownership and other factors, Defendants had more than the allowed amount of revenue and employees.”
January 30, 2025 – T. Edelman