The United States Attorney’s Office of the Eastern District of New York recently announced that a New York doctor pleaded guilty to allegations of fraud. The feds claim the physician violated the law when he misused the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan Program (EIDLP).
How did the physician misuse the loans?
The government provided emergency financial assistance through the PPP and EIDLP loans to qualifying businesses negatively impacted by the COVID-19 pandemic. These loans provided forgivable assistance to small businesses to provide funds for job retention, rent, utilities, and other expenses.
The prosecution claims to have evidence the healthcare professional applied for and received funds from these loans and then used these funds to finance an “extravagant lifestyle.” They support these allegations with evidence the funds were placed in various bank accounts, allegedly in an attempt to remove the money from its original source (the government loans) in case of an investigation.
When faced with the evidence, the physician chose to accept a plea deal. He now faces up to 30 years imprisonment, forfeiture of over $3.7 million and an additional fine of up to $250,000.
What does this mean for other physicians or healthcare business leaders who used these types of loans?
Healthcare professionals may have used these and similar government programs during the pandemic to help stay afloat. It is important to use these funds as intended. An internal audit can help to make sure this was done.
The case demonstrates the need to take any notification of an investigation seriously. The government is taking allegations of fraudulent use of these loans seriously and will aggressively pursue criminal charges if applicable.
Attorney John Rivas is responsible for this communication