CARES Act Fraud
A $105 million civil whistleblower lawsuit filed alleging CARES Act fraud. The 2020 program was meant to assist small businesses and was funded through the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act.
The lawsuit shows the need for oversight on how nursing home operators spent COVID relief funds. The taxpayer money was intended for staffing and resident care. Providers have a legal duty to document and report Provider Relief Funds.
The federal suit alleged the owners of related entities managing the nursing home, home health and staffing agency companies “fraudulently obtained CARES Act disaster relief by means of fraudulent certifications of eligibility.”
New York-based Citadel Care Centers and its affiliates accepted forgivable loans from the Paycheck Protection Program. 15 related Citadel companies connected to owner Leopold Friedman received individual loans ranging from $164,000 to $9.1 million. The combined loans total $35.3 million which violates the CARES Act cap of $10 million per enterprise.
DOJ may increase related audit activity soon.
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