In what is seen as a landmark False Claims Act settlement, a regional bank with headquarters in Houston will pay around $18,700 to satisfy claims that it processed a Paycheck Protection Program (PPP) loan for an ineligible beneficiar
According to a press release issued on Tuesday by Jennifer Lowery, U.S. attorney for the Southern District of Texas, Prosperity Bank, which manages $37.4 billion in assets across more than 270 banking locations in Texas and Oklahoma, processed a $213,400 PPP loan in May 2020 for a client who bank employees were aware was facing criminal charges.
For executing the incorrect loan, the bank was paid a charge of $10,670 "to which it was not entitled," according to the press statement.
In 2020, the U.S. government provided PPP loans to failing companies as a result of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Upon fulfillment of specific requirements, the debts would be forgiven.
The Woodlands Pain Institute's sole proprietor, Dr. Emad Bishai, received the PPP loan that Prosperity Bank executed. When asked if he was the subject of an indictment, criminal information, arraignment, or any method for which criminal charges may be filed, Bishai ticked "no" and initialed his name beneath the question. According to the press release, bank staff approved the loan while being aware that Bishai was indicted on felony charges in Montgomery County "arising from his practice of prescribing opioid medicines."
In November 2021, Bishai agreed to a $523,000 settlement to end his legal obligations resulting from false medical billing and his submission of the PPP loan application. In 2022, he fully returned the PPP loan, according to the Justice Department.
Prosperity Bank, according to the agency, cooperated with its inquiry, supplied pertinent information as it went along, and put extra compliance controls in place.
An inquiry for comments was not immediately answered by Prosperity Bank.
By fLEXI tEAM