A district court in the Southern District of New York recently unsealed a qui tam case brought by relator GNGH2, Inc., a for-profit company, against 15 entities that allegedly operated nursing homes in the Bronx, New York and in Florida and various health care staffing agencies. The U.S. Attorney’s Office declined to intervene in the suit. GNGH2, Inc. alleged that the entities applied for and received Paycheck Protection Program (PPP) loans from the Small Business Administration (SBA) under the Coronavirus Aid, Relief and Economic Security Act of 2020 (CARES Act) in an amount exceeding $35 million. According to the suit, the entities were under common ownership with Citadel Care Centers and were not entitled to the loans and forgiveness of them because in the aggregate they exceeded “the maximum assets, payroll size, and revenue for qualification” under the PPP.
The PPP provided forgivable loans to help small businesses and nonprofit institutions impacted by the COVID-19 pandemic to make payroll and cover other expenses. It was authorized initially by the CARES Act, modified by subsequent legislation, and reauthorized by the Coronavirus Response and Relief Supplemental Appropriations Act of 2021. Under the PPP, generally, small businesses with up to 500 employees, including the self-employed, were eligible to take out loans up to $10 million.
Between October 2020 and March 2022, GNGH2, Inc. also filed five separate qui tam actions that various courts ordered unsealed...
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