DOJ reports that the Bakersfield, Calif. Medical practice is agreeing to resolve allegations of the Paycheck Protection Act under the Cares Act – repayment of $ 430,000 loan-plus penalties
April 21, 2021 – SACRAMENTO, California – Sandeep S. Walia, MD, a professional medical company (Walia PMC), and Sandeep S. Walia, MD, owner and president of the company, have agreed to pay a combined $ 70,000 in damages and fines to clarify allegations that they knowingly made a false testimony to obtain a loan under the Paycheck Protection Program (PPP) of the Coronavirus Aid, Relief and Economic Security (CARES) Act Acting US attorney Phillip A. Talbert announced today.
As part of the settlement, Walia PMC also agreed to repay the $ 430,000 PPP loan obtained from the misrepresentation with interest.
The CARES Act was passed on March 29, 2020 to provide emergency financial aid to millions of Americans suffering from the economic impact of the COVID-19 pandemic. One source of relief from the CARES Act was the PPP’s approval of up to $ 349 billion in unsuccessful small business loans for job retention and certain other expenses. In April 2020, Congress approved over $ 300 billion, and in December 2020, Congress approved additional PPP funding of nearly $ 285 billion.
During the first round of PPP, no eligible borrower was allowed to receive more than one PPP loan. The SBA noted that this restriction is needed to ensure that as many eligible borrowers as possible can obtain a PPP loan. This helped advance the goal of Congress to employ and pay workers in the United States by 2020.
The settlement resolves the allegations that Dr. Walia falsely certified to a PPP lender that his doctor’s office did not get a PPP loan after receiving one from another lender for approximately $ 280,000. As a result, Walia PMC received a second PPP loan for $ 430,000 that it was not entitled to. Walia PMC did not seek forgiveness for the $ 430,000 loan, but its false testimony resulted in a false claim for processing fees being made with the SBA. This settlement resolves allegations that the conduct of Walia and Walia PMC violated the False Claims Act, which allows the government to seek damages and penalties for submitting false claims to the United States. Walia and Walia PMC fully cooperated in the investigation.
“The second PPP loan should have been paid out to another small company that suffered financially during the COVID-19 pandemic,” said acting US attorney Talbert. “The Department of Justice and our partners in the SBA will use all the tools at our disposal, including civil fraud laws, to reclaim funding for federal programs to help those in need during this national emergency.”
“It is intolerable to fraudulently attempt to gain access to a program that aims to help small businesses struggling for personal gain and profit,” said Weston King, SBA OIG special agent for the West Region. “OIG and its law enforcement partners will relentlessly pursue fraudsters and bring them to justice. I want to thank the US Attorney General and our law enforcement partners for their dedication and pursuit of justice. “
U.S. Assistant Attorney Matthew R. Belz handled the case for the United States. The investigation was conducted with the US Small Business Administration, Inspector General’s Office.