Complaint under the False Claims Act — United States ex rel. GNGH2 Inc. v. Carson Tahoe Physician Clinics

Summary

A Complaint under the False Claims Act, Document 1, filed Jul 11, 2023 in Case 2:23-cv-1361 KJM CKD, United States ex rel. GNGH2 Inc. v. Carson Tahoe Physician Clinics, in the United States District Court for the Eastern District of California, marked to be submitted under seal. The relator alleges that the defendant fraudulently obtained disaster relief under the Paycheck Protection Program by certifying that it was eligible, when its status as an organization and its relationship with its affiliates made it ineligible. It lists two PPP loans of $2,095,980 and $2,000,000, both later forgiven, and alleges at least approximately $4,095,080 received. The relator seeks judgment of $12,285,240 for the United States, together with costs, interest, civil penalties and a qui tam award.

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“Complaint under the False Claims Act — United States ex rel. GNGH2 Inc. v. Carson Tahoe Physician Clinics.” Original at archive.org. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/court-filing-no-2-23-cv-01361-dkt-1-e-d-cal-9c5a806dad/, SHA-256 1e0940e49431f131ce420a1a5e74b7b7092afa3bab0a2b1e98f7fd15ccff218c.

Full text

FILED
Jul 11, 2023
Yael Lerman, Esq.(California Bar # 281311) CLERK, U.S. DISTRICT COURT
EASTERN DISTRICT OF CALIFORNIA
1
ylmazar@gmail.com
2
6505 Wilshire Boulevard
Los Angeles CA 90048
3 Tel. 310-836-6140 TO BE SUBMITTED UNDER SEAL

7
SEALED
8 UNITED STATES DISTRICT COURT FOR

9 THE EASTERN DISTRICT OF CALIFORNIA

10
2:23-cv-1361 KJM CKD
) Case No.:. _________________
11 United States ex rel. GNGH2 Inc. )
) COMPLAINT UNDER THE FALSE
12 Plaintiff, ) CLAIMS ACT
)
13 vs. )
CARSON TAHOE PHYSICIAN CLINICS, )
14 )
Defendant(s) )
15 )

16
Plaintiff-Relator, complaining of the Defendant by its attorney respectfully sets forth and
17

18
alleges as follows:

19 I. Nature of the Case

20 1. This is a false claims act claim. The Qui Tam Plaintiff and Relator, GNGH2 Inc.
21 ("Relator"), alleges that the Defendant fraudulently obtained disaster relief under the Paycheck
22
Protection Program means of fraudulent certifications of eligibility.
23
II. Parties
24
2. Plaintiff-Relator GNGH2 is a New Jersey corporation.
25

Complaint - 1
3. Defendant CARSON TAHOE PHYSICIAN CLINICS ("CTPC" or "Defendant") is a
1

2
Nevada for-profit corporation which is duly authorized to do business in California.

3 4. Defendant operates a medical practice which serves patients in northern Nevada and

4 eastern California. Defendant is a wholly-owned subsidiary of the Carson Tahoe Health System
5 which, as a combined entity, has thousands of employees and hundreds of millions of dollars in
6
assets.
7
III Jurisdiction and Venue
8
5. This Court has Federal Question jurisdiction over this matter in that Relator asserts
9
claims under the False Claims Act, a federal statute.
10

11 6. This Court has personal jurisdiction over the Defendants in that personal jurisdiction

12 under the False Claims Act is based on the Defendants' contacts with the United States as a

13 whole. In this case, the Defendants are located in the United States and in any event this matter
14
arises from the Defendants' application for and receipt of a federal grant.
15
7. This matter is venued in the Eastern District of California based on the fact that the
16
Defendant is duly qualified to transact business in California and offers services to patients in the
17
Eastern District of California, specifically in Nevada County and Placer County.
18
V. Background
19

20 8. Throughout most of 2020, the United States was faced with a large-scale outbreak of the

21 virus commonly known as "Coronavirus" and "COVID-19." (the "Coronavirus Epidemic").

22 9. In addition to the Coronavirus Epidemic itself, the United States was faced with large
23
scale outbreaks of panic and hysteria as a result of the Coronavirus Epidemic.
24
10. All of the above has resulted in major economic disruption and as a result Congress
25
enacted various measures including the Cares Act which was intended to provide relief to small
26

Complaint - 2
businesses which lost business due to lockdowns and other measures which were enacted as a
1

2
result of the above-described hysteria.

3 11. The Defendant applied for and received Paycheck Protection relief under the Cares Act

4 as follows:
5 Loan Number Date Amount Forgiven
6
6870807206 4/28/2020 $2,095,980 6/9/2021
7
2078288602 3/13/2021 $2,000,000 11/26/2021
8
12. The Defendant's status as organization and relationship with its affiliates made it
9
ineligible. Nevertheless, the Defendant certified that it was eligible.
10

11 VI. (Count I) Violation of the False Claims Act

12 13. The False Claims Act imposes liability on a person or entity who " knowingly makes,

13 uses, or causes to be made or used, a false record or statement material to a false or fraudulent
14
claim" 31 U.S.C. Section 3729(a)(1)(B)
15
14. The Courts have held that this can include false statements regarding eligibility to
16
participate in a program. See United States ex rel. Kirk v. Schindler Elevator Corp., 601 F.3d
17
94, 116 (2d Cir. 2010), rev'd on other grounds, 131 S.Ct. 1885 (2011) ("[C]laims may be false
18
even though the services are provided as claimed if, for example, the claimant is ineligible to
19

20 participate in the program.")

21 15. Thus, the Defendant's certification of eligibility violated the False Claims Act because it

22 was false and required for eligibility for disaster relief.
23
VII. Relief Sought
24
16. On behalf of the government, Relator is seeking judgment for the triple damages and civil
25
penalties set forth in 31 U.S.C. Section 3729.
26

Complaint - 3
17. The Defendant received at least approximately $4,095,080 in disaster relief as a result of
1

2
the certification set forth above.

3 18. Accordingly, Relator seeks judgment in the amount of $12,285,240 against the

4 Defendant and in favor of the United States, together with costs, interest, civil penalties, an
5 appropriate qui tam award, and such other and further relief as the Court deems just.
6

7
Yael Lerman, Attorney for Relator
8 GNGH2 Inc.

9 6505 Wilshire Boulevard
Los Angeles CA 90048
10
Tel. 310-836-6140
11 Dated: Los Angeles, CA
July 9, 2023
12

Complaint - 4

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