By: Richard L. Smith
An Atlantic County-based health system has reached a settlement agreement with the United States over allegations that it violated the False Claims Act by receiving a Paycheck Protection Program (PPP) loan to which it was not entitled, U.S. Attorney Philip R. Sellinger announced Wednesday.
Shore Memorial Physicians’ Group (SPG), an affiliate of Shore Memorial Health System Inc., applied for and received a $2.78 million PPP loan despite being ineligible for the loan due to its affiliation with Shore Memorial Health System, a non-profit organization.
According to the complaint, SPG did not qualify as a small business, a requirement for PPP loans under the program established by the CARES Act in March 2020 to assist small businesses impacted by the COVID-19 pandemic.
In addition to securing the loan, SPG later sought and obtained forgiveness of the full $2.78 million loan.
As part of the settlement, Shore Memorial Health System has agreed to pay $3.15 million to resolve the allegations.
The health system fully cooperated with the investigation, according to the settlement agreement.
The resolution also concludes a lawsuit filed under the whistleblower provision of the False Claims Act, which allows private individuals to sue on behalf of the U.S. government and share in any recovery. In this case, the whistleblower will receive $315,000.
U.S. Attorney Sellinger commended the work of special agents from the Small Business Administration's Office of Inspector General, led by Supervisory Criminal Investigator Angelo Palmeri in New York, for their role in the investigation.