Medical group agrees to pay $2.8M to settle False Claims Act allegations

ALEXANDRIA, Va. – Fairfax Radiological Consultants, PLLC formerly known as Fairfax Radiological Consultants, P.C. (FRC), of Fairfax, agreed to pay $2,881,260 to settle False Claims Act allegations that it falsely reported its payroll costs to receive full forgiveness of a $6.7 million Paycheck Protection Program (PPP) loan.

The PPP offered loans to eligible small businesses for economic relief during the COVID-19 pandemic. PPP borrowers were required to provide their income and supporting documents to qualify for the loan amount and for later loan forgiveness.

In 2019, FRC employed over 500 individuals. Using its 2019 employee payroll, FRC was able to apply for a $6.8 million PPP loan in April 2020. At the time of its April 2020 PPP loan application, FRC employed less than 100 people.

In April 2021, FRC applied for forgiveness of the loan. The United States alleged that FRC falsely represented its eligible payroll costs for 98 employees in its loan forgiveness application, which enabled FRC to receive full forgiveness of the $6.8 million loan. The United States alleged that, in actuality, FRC was only entitled to loan forgiveness of $4,945,860.

The matter was investigated by Assistant U.S. Attorney Gina Kim and auditor Peter Melaragni.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.

The civil claims settled are allegations only; there has been no determination of civil liability.