A Woodland Hills-based corporation that runs a rehabilitation center, and its owner, have been ordered to pay at least $1.5 million to settle allegations they improperly received COVID-19 business loans, officials announced Monday.
A Los Angeles federal judge found that JMG Investments Inc. and owner Jeffrey Schwartz violated the False Claims Act when they knowingly received and retained more than one Paycheck Protection Program loan prior to Dec. 31, 2020, in violation of the program’s rules.
The Jan. 15 judgment of U.S. District Judge Michael W. Fitzgerald resolves claims brought in a lawsuit filed under the qui tam or whistleblower provisions of the FCA which permit private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery.
The government may intervene in the action, as it did in this case. The amount of the whistleblower share in this case has not yet been determined.
“Every pandemic relief dollar improperly used was money other businesses needed to stay afloat,” First Assistant U.S. Attorney Bill Essayli said in a statement. “My office will continue tracking down individuals and companies who unlawfully took advantage of COVID-19 government aid.”