Unified Care Services Settles $18 Million False Claims Act Allegations Over PPP Loans

During the height of the COVID-19 pandemic, the Paycheck Protection Program (PPP) was more than just financial aid—it was a lifeline for small businesses fighting to survive. But for Unified Care Services LLC, a chain of skilled nursing facilities based in Torrance, California, it became the focal point of an $18 million settlement for alleged fraud. This case serves as a sobering reminder of the consequences when businesses misuse taxpayer-funded programs meant to provide relief.

Unified Care, along with its affiliates and owner Emmanuel David, allegedly misrepresented themselves to qualify for PPP loans in 2020. Under the program, only small businesses—defined in part as having fewer than 500 employees, including affiliates under common control—were eligible for the funds.

The Justice Department alleged that Unified Care and its affiliates knowingly certified false information in their loan applications, hiding the extent of their operations and workforce. By presenting themselves as small businesses, they secured loans and loan forgiveness they were not entitled to receive.

Principal Deputy Assistant Attorney General Brian M. Boynton explained the harm succinctly: “When ineligible businesses improperly obtained loans, they harmed both the taxpayers who funded the program and the eligible businesses who were denied relief.”

A Costly Reckoning

Unified Care’s settlement resolves claims of False Claims Act violations. In addition to returning $18 million, the resolution implicates numerous affiliates, including Casa Montana LLC, Pacific Palms Healthcare LLC, and others, highlighting the breadth of the alleged misconduct.

Government officials expressed their commitment to safeguarding pandemic relief funds. U.S. Attorney Martin Estrada called out the damage caused by such actions, stating, “COVID-relief programs were designed to help people and businesses during the worst public health crisis this nation had seen in one century. My office will continue to pursue those who knowingly cheat taxpayers.”

Key to uncovering the scheme was whistleblower Ashwani Chawla, who filed the lawsuit under the qui tam provisions of the False Claims Act. For helping bring the misconduct to light, Chawla will receive more than $2 million from the settlement—a recognition of the vital role whistleblowers play in holding organizations accountable.

A Broader Message on Compliance

Unified Care’s case is one of many reminders that pandemic relief programs were, in fact, not an open invitation for fraud. Mandy Riedel, Director of COVID-19 Fraud Enforcement, reinforced the government’s stance, “This resolution demonstrates the department’s commitment to ensuring that those who improperly obtain federally guaranteed PPP loans are held accountable and funds repaid to the American taxpayer.”

Similarly, Weston King of the SBA’s Office of Inspector General highlighted the ongoing collaboration to uncover fraud schemes, ensuring relief funds remain protected.

This settlement not only closes a chapter for Unified Care but also serves as a warning to businesses nationwide that when public funds are involved, transparency and compliance are non-negotiable. The PPP was designed to uplift struggling small businesses during a time of crisis, and cases like this underscore the need to protect that mission.

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