An Atlantic County health system agreed to repay a previously forgiven $2.8 million pandemic loan but has not admitted wrongdoing.
Shore Memorial Physicians Group, an affiliate of Shore Memorial Health System, applied for and received a Paycheck Protection Program loan of $2,836,077.17. The paperwork was signed by Dr. David May, as president of the group.
The PPP was created in March 2020, as part of the Coronavirus Air, Relief and Economic Security, or CARES, Act. The billions in forgivable loans was meant to help small businesses struggling to pay employees and other business expenses.
But the group's affiliation with the health system — which runs Shore Medical Center in Somers Point — made it ineligible because it is not a small business, U.S. Attorney Philip Sellinger said.
Shore will pay more than $3.15 million under the settlement agreement, which "is neither an admission of liability by the Defendants nor a concession by the United States that its claims are not well founded," the settlement reads.
Zachary Holtzman brought the issue to the government's attention by filing a whistleblower lawsuit under the False Claims Act. As a result, he will receive $315,000 as the "relator's" portion of the settlement.
Shore Memorial Health System fully cooperated in the investigation and resolution of this matter, Sellinger said.
Sellinger credited special agents of the Small Business Administration, Office of Inspector General, under the direction of Supervisory Criminal Investigator Angelo Palmeri in New York, with the investigation.
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 Hotline at 866-720-5721 or via the NCDF Web Complaint Form.
