A $105 million federal lawsuit filed last week — one possibly on its way to a quick dismissal — shows the growing threats nursing home operators face in accounting for their right to collect and spend COVID relief funds.

A civil whistleblower suit filed Wednesday in the US District Court for the Southern District of New York alleged the owner of related nursing home, home health and staffing agency companies in at least four states “fraudulently obtained CARES Act disaster relief by means of fraudulent certifications of eligibility.”

GNGH2, which claimed to make its allegations on behalf of the federal government, accused New York-based Citadel Care Centers and its affiliates of improperly accepting forgivable loans from the Paycheck Protection Program. The 2020 program was meant to assist small businesses and was funded through the Coronavirus Aid, Relief, and Economic SecurityAct, or CARES, Act.

In all, 15 related Citadel companies, including four nursing homes in New York and six in Florida, connected to owner Leopold Friedman received individual loans ranging from $164,000 to $9.1 million.

GNGH2, a New Jersey corporation fronted by David Abrams, the attorney who filed the complaint, said the combined loans totaling $35.3 million violated the CARES Act cap of $10 million per business.

“Looking at the concern as a whole, the Defendants and related entities had far more than the maximum assets, payroll size, and revenue for qualification,” Abrams said in his filing. “...

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