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SBA and Department of Treasury Announce Disclosure of PPP Recipients

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Small Business Administration Paycheck Protection Program Updates

SBA and Department of Treasury Announce Disclosure of PPP Recipients

After weeks of mounting public and congressional pressure, on Friday, June 19, the SBA and Department of Treasury announced that it will make information regarding the recipients of PPP loans public. According to the Department of Treasury’s press release, the SBA and Department of Treasury reached an agreement with bipartisan leaders of the U.S. Senate Small Business Committee to disclose the business names, addresses, NAICS codes, zip codes, business type, demographic data, non-profit information, jobs supported and loan amount ranges for businesses that received $150,000-$10 million. Businesses that fall into this category account for nearly 75% of PPP loan dollars approved. For businesses that received less than $150,000, the SBA and Treasury will not release individual business names, but will release the total loan amount, aggregated by zip code, by industry, business type, and other demographic information.

The Department of Treasury’s press release is available here.

DOJ Continues to Aggressively Pursue SBA Paycheck Protection Program Fraud

On May 5, the DOJ filed its first fraud case in connection with the SBA PPP. Since then, DOJ has filed a number of cases nationwide against individuals, commonly charging wire fraud, bank fraud, making false statements to a financial institution, making false statements to the SBA, money laundering, and/or conspiracy to commit these offenses. The government continues to file charges in connection with PPP fraud, demonstrating the priority the Justice Department is placing on combating fraud in connection with the PPP.

This week, the government filed charges against Michael George McQuaran of Austin, Texas, for defrauding the PPP of more than $2 million when he allegedly submitted false applications and supporting paperwork on behalf of two fictitious companies to secure PPP loans. McQuaran received in excess of $2 million in PPP funds that were used for personal purchases, including the purchase of a 26’ Pavati Wake Boat and a Rolls Royce.

Read DOJ’s press release here.

Another Texas man, Fahad Shah, was charged in an indictment unsealed this week with wire fraud, money laundering, and making false statements to a financial institution for allegedly filing fraudulent loan applications. Shah allegedly falsely represented that he had over 120 employees earning wages when he actually had no employees at the time and submitted fraudulent documentation in support of his applications. Shah received over $1.5 million in PPP loans, which he used primarily for personal gain, including personal investments, home mortgage payments, and the purchase of a Tesla.

Read DOJ’s press release here.

Also this week, a Massachusetts man was charged in a criminal complaint with wire fraud for allegedly filing false loan applications seeking more than $13 million in forgivable loans. Elijah Majak Buoi, president and CEO of Sosuda Tech, LLC, an information technology company, is alleged to have misrepresented the number of employees and payroll expenses and is alleged to have falsely certified that his employees’ primary residence is located in the United States. Buoi received over $2 million in PPP funds.

Read DOJ’s press release here.

Additionally, an ophthalmologist previously charged with healthcare fraud and on pretrial release was charged this week with bank fraud and making false statements in connection with PPP loan applications, as applicants with pending criminal charges are not eligible for PPP loans. Ameet Goyal allegedly falsely represented on separate applications to the SBA and a financial institution that he was not subject to any pending indictment. Goyal is also alleged to have circumvented the PPO’s single-loan rule by submitting two separate applications under two different business names, identification numbers, e-mail addresses, and loan amounts, all for the same underlying practice, despite representing on each application that he didn’t own any other business other than the listed applicant. As a result, Goyal received two different PPP loans totaling over $630,000.

Read DOJ’s press release here.

DOJ News and Litigation Updates

Former Service Members Plead Guilty in $65 Million TRICARE Fraud Scheme

On June 24, three former U.S. service members – Kyle Adams, Daniel Castro, and Jeremy Syto – pled guilty for their participation in a fraud scheme that defrauded TRICARE, the military healthcare program, out of more than $65 million.

Adams, Castro, and Syto admitted to illegally recruiting TRICARE patients to receive extremely expensive and largely unnecessary prescription compounded drugs, which are specialty medications mixed by a pharmacist to meet a patient’s specific medical needs that cannot be met by FDA-approved medication. The three individuals recruited TRICARE patients by promising them monthly payments to participate in fictitious ongoing medical evaluations designed to assess medications. Once a TRICARE beneficiary was approved to receive compounded medications, that beneficiary’s information was sent to Choice, MD, a Tennessee medical clinic co-owned and operated by Jimmy and Ashley Collins, the alleged ringleaders of this scheme. Without conducting a medical review or examination, doctors and medical professionals at Choice MD wrote prescriptions for the TRICARE beneficiaries that were sent to The Medicine Shoppe, a pharmacy in Utah. The Medicine Shoppe filled the compounded prescriptions and received significant reimbursement from TRICARE. The owners of The Medicine Shoppe paid kickbacks to the Collinses based on a percentage of the TRICARE reimbursement paid for the prescriptions, and the Collinses then paid kickbacks to their recruiters.

Two doctors and a nurse practitioner at Choice MD previously pled guilty for their roles in the conspiracy to commit healthcare fraud, as did the corporate owner of The Medicine Shoppe, and two former Marines, who acted as recruiters. The government also filed additional charges against Jimmy and Ashley Collins, who were originally charged in January 2018.

Read DOJ’s press release here.

August University Medical Center, Inc. To Pay $2.625 Million to Settle FCA Allegations

August University Medical Center, Inc. agreed to pay $2.625 million to resolve allegations that it violated the False Claims Act when it allegedly submitted claims to federal healthcare programs for medically unreasonable and unnecessary procedures and post-surgical follow-up care. The settlement with the DOJ, the State of Georgia, and the State of South Carolina resolve allegations without determining August University’s liability.

Read DOJ’s press release here.


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