Carson Tahoe Health
Carson Tahoe Health System has settled with the U.S. government for approximately $8.9 million without admitting liability regarding allegedly ineligible pandemic-era loans, according to a March 24 news release from Acting U.S. Attorney Michele Beckwith.
“Carson Tahoe Health System has reached a settlement agreement with the U.S. government regarding Paycheck Protection Program (PPP) loans received during the COVID-19 pandemic,” Carson-based CTH said in a statement. “While we maintain that we applied for and used these funds in good faith during an unprecedented crisis, we have chosen to resolve this matter to avoid the uncertainty and expense of prolonged litigation.”
According to the U.S. Attorney's Office, Eastern District of California, congress created the PPP in March 2020 as part of the Coronavirus Aid, Relief, and Economic Security Act, “to provide relief to small businesses experiencing economic hardship during the COVID-19 pandemic.”
“To qualify for a loan, businesses were required to meet certain eligibility requirements accounting for any affiliated entities. The United States contends that Carson Tahoe Health System and its affiliated entities were ineligible to receive PPP loans because they exceeded the size limitations in the Small Business Administration’s affiliation rules,” according to the U.S. Attorney’s Office. “In May 2020, Carson Tahoe Health System, Carson Tahoe Physician Clinics, and Carson Tahoe Continuing Care Hospital each received a PPP loan, totaling $5,077,011 in loan disbursements. After receiving their loan forgiveness applications, the Small Business Administration forgave these loans.
“In February 2021, Carson Tahoe Physician Clinics applied for a second PPP loan of $2 million,” the U.S. Attorney’s Office maintained. “After Carson Tahoe Physicians Clinic requested loan forgiveness in September 2021, the SBA forgave this PPP loan. The four loans resulted in the United States paying $7,267,009 including forgiven loan principal and interest, and lenders fees.”
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.”
According to the U.S. Attorney's Office, “the settlement stems from allegations originally brought in a lawsuit filed by a whistleblower under the qui tam provisions of the False Claims Act, which allow private parties, known as relators, to bring suit on behalf of the government and to share in any recovery. In connection with the settlement, the relator will receive a percentage of the recovery.”
“The claims resolved by this settlement are allegations only, and there has been no determination of liability,” the office further stated.
“Our priority has always been, and remains, the health and well-being of our patients, staff, and the communities we serve,” CTH said. “We appreciate the dedication of our healthcare workers who continued to provide essential care throughout the pandemic, and we remain committed to upholding the highest standards of integrity and service. We look forward to continuing our mission of delivering high-quality healthcare to the quad county region and beyond.”