Radiology practice will pay $2.9M to settle allegations it falsified PPP loan documents
A D.C. area radiology practice will pay $2.9 million to settle allegations it violated the False Claims Act by falsifying figures in its Paycheck Protection Program loan documents.
The first Trump administration launched the initiative in April 2020, lending relief to small businesses hobbled by COVID-19 closures. Borrowers were required to provide documents detailing their payroll and income to score PPP funding and possible eventual loan forgiveness, the U.S. Attorney's Office said Wednesday.
Fairfax Radiological Consultants had employed over 500 individuals as of 2019, but by April 2020, its roster was down to fewer than 100. However, the Virginia-based imaging group allegedly used the out-of-date payroll numbers to procure a $6.8 million PPP loan. During that timeframe, a reorganization of the practice took place, with most employees shifting into a joint venture with Inova Health System (called "Fairfax Radiology Centers").
A year later in April 2021, FRC applied to wipe out the balance, but the practice allegedly misrepresented its eligible payroll costs for 98 employees on the application, allowing Fairfax Radiological Consultants to receive full forgiveness of the loan, authorities charge. In actuality, the practice was only entitled to keep $4,945,860, with it now owing $2,881,260 to the federal government.
“The civil claims settled are allegations only,” the U.S. Attorney’s Office for the Eastern District of Virginia said in an April 2 announcement, emphasizing “there has been no determination of civil liability.”
Fairfax Radiological Consultants employs 110 physicians servicing 20 outpatient imaging centers throughout northern Virginia and a large hospital system, and it is currently hiring.
The practice shared a statement Thursday in response to the allegations.
"After careful consideration, FRC recently agreed to settle a matter with the Department of Justice arising from a certain inquiry relating to the Paycheck Protection Program loan which FRC received during the COVID-19 pandemic. Our decision to settle was not made lightly," a company representative told Radiology Business by email. "In an effort to avoid a prolonged legal dispute, we agreed to settle with the DOJ with no admission of liability by FRC so that we may continue to focus on treating our patients."
FRC expanded through acquisition in 2023, adding the Association of Alexandria Radiologists and its 15 physicians and two imaging centers. Leaders established Fairfax Radiology Centers in 2020 as a joint venture between Fairfax Radiological Consultants, P.C., and Inova/Radiology Imaging Associates.
Editor's note: This story has been updated to include a statement from FRC and to clarify that Fairfax Radiological Consultants and Fairfax Radiology Centers are separate and distinct entities. Radiology Business regrets the confusion.
Marty Stempniak has covered healthcare since 2012, with his byline appearing in the American Hospital Association's member magazine, Modern Healthcare and McKnight's. Prior to that, he wrote about village government and local business for his hometown newspaper in Oak Park, Illinois. He won a Peter Lisagor and Gold EXCEL awards in 2017 for his coverage of the opioid epidemic.