Feds Hot on the Trail of PPP Fraud

On August 19, a Kansas chiropractor was convicted on multiple charges for Paycheck Protection Program (PPP) loan fraud. According to the U.S. Department of Justice, Timothy Dale Warren was charged with four counts of bank fraud, two counts of money laundering, and four counts of false statements. According to court documents, as owner of Titan Medical Center LLC Warren fraudulently obtained PPP loans totaling approximately $145,800 from two banks, then allegedly used a third bank to conceal the proceeds.

Warren is just the latest healthcare professional to be charged with PPP loan fraud, an area that the DOJ has said is a high priority. According to a recent article in the New York Times, there are 500 people working on pandemic-fraud cases across the offices of 21 inspectors general, plus investigators from the F.B.I., the Secret Service, the Postal Inspection Service and the Internal Revenue Service.

The Times article goes on to note that 1,500 people have already been charged with pandemic-related fraud and more than 450 people have been convicted. While that may sound like a lot, it’s really a mere drop in the bucket when you consider that the government handed out $800 billion in PPP loans from April 3, 2020, through May 31, 2021, according to the Government Accountability Office.

The program was created to help small businesses get low-interest loans, many of which were forgiven. But many people saw it as a way to obtain free money to use as they saw fit, and not always to keep the lights on at their company.

But some, such as Jonathan Markovich of Bal Harbour who operated multiple South Florida addiction treatment facilities, have been caught. He was sentenced to 188 months in prison for his role in a fraud scheme that included paying kickbacks to patients through patient recruiters and receiving kickbacks from testing laboratories. He also was separately convicted of two counts of bank fraud related to fraudulently obtaining PPP loans for two of the treatment centers.

In March, a New York ophthalmologist was sentenced to 96 months in prison for orchestrating a seven-year healthcare fraud scheme by falsely billing for millions of dollars of upcoded procedures, and also for fraudulently obtaining two PPP loans totaling $637,200. He used the money to pay business and personal expenses, including by making a payment to a country club in Westchester, New York within days of receiving the first loan, as well as payments to a California vineyard and golf merchandise website.         

We have written several blogs relating to COVID-19 fraud and it’s clear the federal government has made it a priority of its enforcement actions.

In addition to providing many other healthcare law defense and compliance services, The Health Law Offices of Anthony C. Vitale represents individuals and entities under investigation or accused of fraud by federal and/or state authorities. Give us a call at 305-358-4500 or email info@vitalehealthlaw.com.