Nursing Home SBA Loan Fraud: A Whole Chain Behind a Small-Business Loan

Nursing home PPP loan affiliation fraud involves concealing common ownership or control and affiliate employees to obtain small-business loans or loan forgiveness. You may know who controlled several facilities, which companies employed their staff and why those connections disappeared from the loan application. An employee count can look very different once the rest of the chain comes into view.

The Justice Department’s case against Unified Care Services LLC shows the issue directly. The government alleged that companies in the skilled nursing chain presented themselves as eligible small businesses while leaving out the common ownership and control that made them ineligible. The allegation reached both the applications for the money and the later requests to have the loans forgiven.

How Affiliates and Common Ownership Change a Nursing Home PPP Employee Count

A nursing home PPP employee count can turn on affiliates under common ownership and control. In its Unified Care announcement, the Justice Department explained that small-business eligibility considered the applicant’s employees, revenues or net worth together with those of corporate affiliates sharing common operational control. The size of the business extended beyond the company named on an application.

That question fits the way nursing homes do business. The operating company receives payments for care. A property company receives rent, and a management company receives fees. A staffing company may employ people who work inside the facility. The name on the building, the employer on a pay stub and the company receiving a management fee can point to different parts of the operation.

Common ownership can keep rent and fees inside the same enterprise even when the facility records them as expenses. An insider who sees the group accounts may therefore know connections that are much harder to see from a single facility’s books. For a loan-eligibility case, those connections help identify the businesses whose ownership, control and employees need to be examined together.

The Centers for Medicare & Medicaid Services’ nursing home chain information also looks at shared owners, officers and operational or managerial control. Its chain identifiers describe reported relationships. Ownership disclosures, management agreements and payroll records supply the detail needed to connect those relationships to a particular borrower and the count it submitted.

What Unified Care Allegedly Certified

Unified Care, a Torrance-based skilled nursing chain, agreed to an $18 million settlement announced in January 2025. The Justice Department alleged that the borrowers falsely certified they were small businesses with fewer than 500 employees in their loan and forgiveness applications in 2020. According to the department, the applications omitted a larger chain of facilities under common ownership and control.

The alleged advantage was straightforward. A chain could obtain relief intended for small businesses by presenting only part of itself on the paperwork. Taxpayers funded the relief, and eligible small businesses were the intended recipients. The ownership information mattered because it changed which business the government was being asked to support.

The Justice Department’s allegations covered false information in both the loan applications and the later requests for forgiveness. Borrowers had to certify the truthfulness and accuracy of their application information, including business size and employee numbers.

A whistleblower brought the qui tam case that the settlement resolved. The announcement said the whistleblower would receive $2.07 million in connection with the settlement. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

PPP Loans and Nursing Home Care Payments Follow Different Records

The Paycheck Protection Program was an emergency loan program administered by the Small Business Administration to help small businesses pay employees and other business expenses during the pandemic. Borrowers could seek forgiveness after spending the money on payroll and other eligible expenses. In Unified Care, the government’s allegation concerned who qualified to receive that assistance.

Medicare and Medicaid reimbursement pays for covered health care. An affiliation case follows the borrower, its size representations and its connections to other businesses.

What Evidence Is Needed to Prove Fraud?

For an affiliation case, the useful evidence connects control of the business, the workforce included in its count and the certification submitted for the loan. Ownership records describe the group. Payroll identifies employers and employees. The application shows what the borrower represented. We examine those records together with the people who know how the count was prepared.

Who Controlled the Borrower

Ownership disclosures, leases, management contracts and corporate records help explain who owned or ran each part of the operation. The question reaches the people directing the borrower as well as the names appearing on its paperwork. Where management and services sit in separate companies, the contracts can explain which responsibilities each company held.

A facility cost report adds another view of the relationships. Related-party reporting identifies connections involving ownership and costs, while supplier accounts and management agreements show the underlying transactions. A rent expense at the nursing home may be income to a property company under the same ownership. Following both sides can reveal the group behind a borrower that appears small on its own.

Which Employees Went Into the Count

Payroll, employee rosters, schedules, time records and staffing-agency invoices answer different parts of the workforce question. A person can work a shift in a nursing home while being employed by a staffing company. The employer and its relationship to the borrower matter when examining who belonged in the business’s employee count.

For someone in payroll or finance, the useful detail may be why one company’s workforce appeared in the calculation while another company’s workforce did not. We connect the underlying employment records to the ownership and control information, then to the number certified. That comparison gives the allegation something more specific than a general impression that the chain was too large.

Who Prepared and Approved the Representation

The application identifies the representation made to obtain the loan. The supporting calculation and communications about it can explain how the borrower arrived at that representation and who knew about the rest of the group. The forgiveness submission supplies the later account given to seek cancellation of the debt.

We examine what the people preparing and approving the paperwork knew about the business they were describing. An accountant may understand the group structure, a payroll employee may understand the workforce, and a manager may know who directed the application. Their knowledge becomes useful together, tied to the same borrower and submission.

Staffing Hours and Employee Counts Answer Different Questions

Staffing records can help connect workers to facilities and employers. CMS’s Payroll-Based Journal records reportable worked hours from employees and contractors. Its staffing-data requirements call for payroll or other auditable records to support those hours.

A worked-hours total measures something different from the number of employees.

For a nursing home PPP concern, that distinction helps keep the inquiry specific. A staffing file can show where someone worked. Payroll can identify the employer. Ownership and management records connect that employer to the borrower. The loan paperwork then shows which workforce the borrower chose to report. We use those connections to examine the certification, including the people and businesses left outside its calculation.

Pro Healthcare: Alleged Kickbacks Behind a PPP Certification

Pro Healthcare Servicing shows a different representation that can connect healthcare conduct to an SBA loan. The northern Virginia home health provider agreed to a $1 million resolution announced in March 2023. The Justice Department alleged that it paid employees at assisted-living and skilled nursing facilities for home health and hospice referrals, then billed Medicare for services to those patients.

The department also alleged that, while making those payments, Pro Healthcare obtained Paycheck Protection Program and Economic Injury Disaster Loan funds by falsely certifying that it was not engaged in illegal activity. The alleged referral payments supplied the conduct behind the allegedly false answer on the loan application.

Unified Care puts the business’s size and connections at the center of the case. Pro Healthcare puts a certification about the company’s activities there. The common question for a nursing-home accountant, manager or business partner is what the borrower told the government and what the people inside the operation knew when it said it.

When You Know Who Was Left Out

If you know why a nursing-home borrower left part of its business out of a PPP application, speak with our whistleblower experts about the ownership and payroll behind that decision. We work with you to connect the people, companies and certifications into your strongest nursing-home SBA loan fraud case. We stay beside you throughout the case and bring in SBA loan fraud whistleblower lawyers who understand affiliation disputes.