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TX medical center agrees to pay $15M to settle with FHA

The Department of Justice (DOJ) recently announced a settlement agreement with a Texas medical center and surgeons. The settlement, for approximately $15 million, is the most recent in a series of claims the DOJ has pursued in recent months against medical professionals, highlighting the continued aggressive efforts even in the midst of the coronavirus pandemic.

What did the TX group do wrong?

The agency claims the group was not honest on applications for loans with the Federal Housing Administration (FHA). FHA loans are available to help build medical centers in underserved areas. The medical group applied for an FHA sponsored loan to help fund construction of their facility. The DOJ states the application included false statements and omissions that overstated the support they would receive from other medical staff while also downplaying potential risks.

The medical center received the loan and ultimately defaulted. The government filed suit stating the group should still be held accountable as the was received under false pretenses. Instead of fighting the charges, the group chose to settle the claim.

What can others learn from this case?

In addition to navigating the stress that is present during the current pandemic, medical professionals need to remain vigilant when it comes to allegations of wrongdoing. As highlighted by this case, the government continues to investigate and prosecute allegations of wrongdoing. These allegations can include claims of False Claims Act (FCA) violations, Stark Law violations or illegal kickbacks as well as other, not as common violations like the FHA case discussed above. It is important to take the allegations seriously and take steps to protect your interests.