Whistleblower lawsuit alleging PPP loan fraud results in $400,000 in damages

On October 11, the U.S. Department of Justice (DOJ) announced a $399,990 settlement with Allstar Health Providers Inc., a California home health agency, and its owner, Maria Chua, over allegations that Paycheck Protection protected them against the false Claims Act (FCA) program (PPP) loan fraud.

According to the DOJ, “In May 2020, Chua submitted two PPP loan applications on behalf of Allstar Health Providers, and in both applications she confirmed that the company would not receive more than one loan before December 31, 2020.”

“Despite these certifications, the United States alleged that Allstar Health Providers received two PPP loans in 2020 and then knowingly and unlawfully withheld the second, duplicate loan,” the government alleges.

The settlement comes from a Qui tam Whistleblower lawsuit filed by J. Bryan Quesenberry. The False Claims Act Qui tam The provisions allow private individuals and private parties to file lawsuits on behalf of the government if they have knowledge that an individual or company is defrauding the government. Qui tam Whistleblowers are entitled to compensation between 15 and 30% of state compensation.

“PPP loans should provide critical relief to small businesses,” said Brian M. Boynton, Assistant Attorney General and Chief of the Justice Department’s Civil Division. “The department is committed to pursuing those who knowingly violated the requirements of the PPP or other COVID-19 relief programs and received relief funds to which they were not entitled.”

“When a person violates the False Claims Act by fraudulently obtaining and retaining PPP loans, taxpayers lose,” said U.S. Attorney Martin Estrada for the Central District of California. “Anyone who violates the law by fraudulently accepting and withholding PPP loans will be held accountable.”

In July 2023, a bipartisan group of senators introduced the False Claims Amendments Act of 2023, which closes some technical loopholes that undermine the success of the FCA. The bill is widely supported by whistleblower advocates.

The National Whistleblower Center (NWC) has issued an action alert calling on Congress to pass the law.

Get active together with NWC:

Call on Congress to strengthen the False Claims Act

Further reading:

The California Home Health Agency and the owner resolve False Claims Act allegations related to an improper Paycheck Protection Program loan

Bipartisan legislation introduced to strengthen the False Claims Act

More whistleblower law on false claims New