Home Health & Hospice Week

DOJ has recovered $1.4 billion in relief funds so far.

The feds are determined to hunt down any malfeasance related to COVID-19 relief funds, and a home health agency example is front and center.

Artur Chanchikyan, the owner of Gentle Touch Home Health Care Inc. in North Hollywood, Calif., had pleaded guilty to about $345,000 in COVID-19 pandemic relief loan fraud, the Department of Justice says in a release.

Strike 1: In December 2019, the Centers for Medicare & Medicaid Services placed Chanchikyan on Medicare payment suspension based on fraud allegations, the DOJ relates. While under suspension, around April 2020, Chanchikyan applied for a Paycheck Protection Program (PPP) loan, falsely representing the agency’s number of employees, average monthly payroll expenses, and that the loan would be used for permissible business purposes. As a result, Gentle Touch received more than $45,000 in PPP loan proceeds.

Strike 2: About the same time, the HHS Provider Relief Fund automatically deposited nearly $140,000 into Gentle Touch’s bank account. In May 2020, Chanchikyan falsely certified to HHS “that he would use the funds to prevent, prepare for, and respond to COVID-19 or to reimburse Gentle Touch for health care related expenses or lost revenue attributable to COVID-19 as required,” the DOJ notes.

Strike 3: In July 2020, Chanchikyan applied to the Small Business Administration seeking a low-interest loan from the Economic Injury Disaster Loan (EIDL) Program, falsely representing the agency’s number of employees and that the loan would be used for permissible business purposes. Gentle Touch received nearly $160,000 in EIDL proceeds, the DOJ says.

“Chanchikyan used the funds from the PPP, PRF, and EIDL programs for his own benefit and for purposes that were different from those he certified,” Justice concludes. He pleaded guilty to wire fraud and faces up to 20 years in prison, according to the release.

The case announcement came just days after the DOJ revealed “the results of a coordinated, nationwide enforcement action to combat COVID-19 fraud, which included 718 enforcement actions — including federal criminal charges against 371 defendants — for offenses related to over $836 million in alleged COVID-19 fraud,” according to a separate release.

“The Justice Department has now seized over $1.4 billion in COVID-19 relief funds that criminals had stolen and charged over 3,000 defendants with crimes in federal districts across the country,” Attorney General Merrick Garland says in the release. “This latest action … should send a clear message: the COVID-19 public health emergency may have ended, but the Justice Department’s work to identify and prosecute those who stole pandemic relief funds is far from over.”

The DOJ also has launched two more COVID-19 Fraud Enforcement Strike Forces: one in Colorado and one in New Jersey. They add to the three strike forces launched in September 2022 in the Eastern and Central Districts of California, the Southern District of Florida, and Maryland, Justice says.

“The two new Strike Forces … will increase our reach as we continue to pursue fraudsters and recover taxpayer funds, no matter how long it takes,” Deputy Attorney General Lisa Monaco pledges in the release.

“This announcement is not a victory lap. Our mission is not complete,” adds Michael Galdo, Acting Director of COVID-19 Fraud Enforcement, in the release. The DOJ urges “anyone with information about allegations of attempted fraud involving COVID-19” to report it via the National Center for Disaster Fraud Hotline at 866-720-5721 or at www.justice. gov/disaster-fraud/ncdf-disaster-complaint-form.