Carson Tahoe Health System Agrees to Pay Over $8.8 Million to Settle Allegations Over Pandemic-Related Loans
Summary
A press release from the U.S. Attorney's Office for the Eastern District of California, dated March 24, 2025, announcing that Carson Tahoe Health System agreed to pay $8,876,475.45 to settle allegations that it and its affiliated entities were not eligible for four Paycheck Protection Program loans. The United States contends the entities exceeded the size limits in the SBA's affiliation rules. In May 2020 Carson Tahoe Health System, Carson Tahoe Physician Clinics and Carson Tahoe Continuing Care Hospital each received a PPP loan, totaling $5,077,011 in disbursements, and in February 2021 the clinics applied for a second PPP loan of $2 million; the SBA forgave all four. The release puts the cost to the United States at $7,267,009 in forgiven principal, interest and lender fees. The release states the claims are allegations only, with no determination of liability.
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Press Release Carson Tahoe Health System Agrees to Pay Over $8.8 Million to Settle Allegations Over Pandemic-Related Loans Monday, March 24, 2025 For Immediate Release U.S. Attorney's Office, Eastern District of California SACRAMENTO, Calif. — Carson Tahoe Health System, which owns Carson Tahoe Physician Clinics and Carson Tahoe Continuing Care Hospital, has agreed to pay $8,876,475.45 to settle allegations that they were not eligible for the four Paycheck Protection Program loans that they obtained, Acting U.S. Attorney Michele Beckwith announced. Congress created the Paycheck Protection Program (PPP) in March 2020, as part of the Coronavirus Aid, Relief, and Economic Security Act, to provide relief to small businesses experiencing economic hardship during the COVID-19 pandemic. To qualify for a loan, businesses were required to meet certain eligibility requirements accounting for any affiliated entities. The United States contends that Carson Tahoe Health System and its affiliated entities were ineligible to receive PPP loans because they exceeded the size limitations in the Small Business Administration’s affiliation rules. In May 2020, Carson Tahoe Health System, Carson Tahoe Physician Clinics, and Carson Tahoe Continuing Care Hospital each received a PPP loan, totaling $5,077,011 in loan disbursements. After receiving their loan forgiveness applications, the Small Business Administration forgave these loans. In February 2021, Carson Tahoe Physician Clinics applied for a second PPP loan of $2 million. After Carson Tahoe Physicians Clinic requested loan forgiveness in September 2021, the SBA forgave this PPP loan. The four loans resulted in the United States paying $7,267,009 including forgiven loan principal and interest, and lenders fees. “This settlement returns millions of taxpayer dollars to the government and reflects our ongoing commitment to enforce the requirements of the Paycheck Protection Program and ensure that only eligible businesses received this critical pandemic relief,” said Acting U.S. Attorney Beckwith. SBA’s General Counsel Wendell Davis stated, “The favorable settlement in this case is the product of enhanced efforts by federal agencies such as the Small Business Administration working with the U.S. Attorney’s Office and SBA’s Office of Inspector General to pursue recovery from those who obtained essential government program funds when they were ineligible to do so.” The settlement stems from allegations originally brought in a lawsuit filed by a whistleblower under the qui tam provisions of the False Claims Act, which allow private parties, known as relators, to bring suit on behalf of the government and to share in any recovery. In connection with the settlement, the relator will receive a percentage of the recovery. The matter was handled by Assistant U.S. Attorney Tara Amin for the Eastern District of California. The claims resolved by this settlement are allegations only, and there has been no determination of liability. Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form . carson_tahoe_settlement_agreement_final_v.1.pdf Updated March 24, 2025 Topic COVID-Related Fraud Component USAO - California, Eastern Related Content Press Release Placer County Man Sentenced for Stealing Nearly $1.5 million in COVID-Relief Loans to Fund Lavish Lifestyle Jedrek Upton, 45, of Lincoln, was sentenced today to one year in prison to be followed by 36 months supervised release, of which 12 months are to be spent on... June 30, 2026 Press Release Sacramento Man Sentenced to 4.5 Years in Prison for Covid-Related Unemployment Insurance Fraud Scheme Roosevelt Gulley, 42, of Sacramento, was sentenced Monday to four years and six months in prison and ordered to pay $575,425 in restitution for wire fraud and aggravated identity theft... June 23, 2026 Press Release Guilty Verdict for California Biolab Operator Following a two-week trial, a jury found Jia Bei Zhu, 64, a Chinese national, guilty of fraudulently selling more than a million COVID tests for nearly $4 million through his Fresno-based... May 6, 2026
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