Allstar Health Providers Inc., based in California, is set to pay $399,990 to the United States to resolve allegations that it violated the False Claims Act (FCA) regarding Paycheck Protection Program (PPP) loan rules.
The company’s owner, Maria Chua, has also been found complicit in the loan saga and will contribute to the payments made to settle allegations that the healthcare provider knowingly breached PPP statutes.
“When an individual violates the False Claims Act by fraudulently receiving and retaining PPP loans, taxpayers lose,” said U.S. Attorney Martin Estrada for the Central District of California. “Those who violate the law by fraudulently receiving and retaining PPP loans will be held accountable.”
The resolution was achieved by a coordinated effort involving the Civil Division’s Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the Central District of California, with assistance from the SBA’s Office of General Counsel and Office of the Inspector General.
Allstar Health to pay $399,990 to resolve allegations
PPP loans were established under the emergency loans category of relief funding by Congress in March 2020 under the Coronavirus Aid, Relief and Economic Security (CARES) Act and administered by the Small Business Administration (SBA).
The loans were intended to keep small businesses running against the struggles of the pandemic environment. They helped employees earn wages and other business expenses during that tough time.
“PPP loans were intended to provide critical relief to small businesses,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division.
Anyone applying for one of these loads must meet rigorous criteria, such as loan awardees declaring they would not receive more than one PPP loan before Dec. 31, 2020.
According to the report, Chua allegedly submitted two PPP loan applications on behalf of Allstar Health Providers in May 2020. In both applications, she certified that “the company would not receive more than one loan before Dec. 31, 2020. ”
Allstar Health Providers would end up receiving more than one relief loan. These two PPP loans were awarded in 2020, and after that, according to the United States, Allstar Health Providers knowingly and “improperly retained the second, duplicate loan.”
Allstar did not repay the second loan awarded, and the United States enforced the SBA breach and the PPP rules, resulting in a $399,990 fine.
“This is another excellent example of the success of the combined investigative efforts of the Small Business Administration and the Department of Justice in aggressively pursuing instances of misconduct and recovering funds from those who choose to commit fraudulent acts against SBA’s COVID-relief programs,” said General Counsel Therese Meers of SBA.
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