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Shore Memorial Health System has agreed to pay the federal government $3.15 million, New Jersey's U.S. Attorney Philip Sellinger said in a news release on Wednesday, Aug. 14. The settlement comes from Shore Memorial Physicians’ Group receiving $2.78 million in a Paycheck Protection Program (PPP) loan.
The physicians' group wasn't eligible for a PPP loan because it isn't a small business since it's an affiliate of Shore Memorial Health System. The physicians' group received forgiveness for the full loan amount.
A whistleblower lawsuit was filed against the healthcare system, accusing the nonprofit of violating the False Claims Act. The company "fully cooperated" with the investigation and agreed to the settlement terms.
The False Claims Act allows whistleblowers to get a portion of the settlement money. The whistleblower in this case will receive $315,000.
PPP loans were created when Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2020. The CARES Act gave small businesses billions of dollars in forgivable loans at the beginning of the pandemic.
The U.S. Small Business Administration estimates $200 billion was stolen from pandemic business programs, including $64 billion in fraudulent PPP loans, according to the FBI.
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