South Jersey health system pays big to settle claim of improper PPP loan

CAMDEN — A South Jersey health system is paying $3.1 million to settle allegations that it improperly took a loan from the federal Paycheck Protection Program during the Covid era.

The payment by Shore Medical Center goes primarily to the federal government, but includes $315,000 for a whistleblower, according to the U.S. Attorney's Office for New Jersey.

A representative of the Somers Point nonprofit, sued as Shore Memorial Health System, could not be reached for immediate comment.

The whistleblower, Zachary Holtzman of Pennsylvania, sued on the federal government's behalf alleging violations of the False Claims Act.

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The lawsuit remained under seal in Camden federal court, without notice to Shore Medical, while the government investigated its claims and decided whether to intervene.

The suit asserted a physicians' group, describing itself as a sole proprietorship with 243 employees, obtained a PPP loan for $2.78 million in April 2020.

It said the group obtained the loan's forgiveness in June 2021, with the proceeds going to Shore Medical.

The U.S. Attorney's Office said the physician's group was ineligible for the loan because it was an affiliate of the health center "and was therefore not a small business within the meaning of the PPP program."

The whistleblower's lawsuit identifies him only as Zachary Holtzman, a Pennsylvania resident.

In announcing the settlement, the U.S. Attorney's Office said Shore Medical "fully cooperated in the investigation and resolution of this matter."

Jim Walsh is a senior reporter with the Courier-Post, Burlington County Times and The Daily Journal. Email: Jwalsh@cpsj.com.

This article originally appeared on Cherry Hill Courier-Post: South Jersey health system pays big to settle claim of improper PPP loan