The Department of Justice (DOJ) requested Rennova Health repay Covid-19 relief funds it received in 2020 as part of a whistleblower lawsuit against the healthcare services provider.
Rennova, based in Tennessee, has been under investigation following a qui tam whistleblower lawsuit filed in July 2021 claiming the company received more than $12.2 million in Covid-19 relief funds and used the money to pay “ineligible expenses and transfer funds to ineligible recipients.” The complaint cited violations of the False Claims Act and was filed in U.S. District Court for the Southern District of Florida.
The complaint alleged between April 2020 and July 2020, $9.5 million of the federal government loans received by Rennova was used to pay Chief Executive Seamus Lagan’s compensation and for other nonrelief purposes. The suit seeks treble damages plus other fees.
The DOJ notified Rennova on Nov. 21 it intervened in the suit, the company disclosed with the Securities and Exchange Commission. The DOJ is seeking the repayment of an unspecified amount in Paycheck Protection Program (PPP) and Department of Health and Human Services Provider Relief funds.
The company said it hired an outside accounting firm to conduct a review of the government funds and how they were spent.
“It has been discovered that certain filling requirements of the company’s operating subsidiaries were incomplete or contained errors that did not accurately reflect the expenditure of provider relief funds received,” Rennova said in its filing. “The company believes that PPP loans were accurately forgiven after the provision of information to the lending bank detailing their use within the parameters permitted.”
Rennova added it believes providing the information requested by the DOJ and the auditor’s review will show the company spent the relief funds in accordance with the rules.
The whistleblower lawsuit was filed by Clifford Barron, a former employee of wholly owned subsidiary CollabRx, Rennova stated. Barron has not been employed by the company since January 2018 and “has no knowledge of the company’s operations, financial status, or controls,” it continued.
Rennova did not respond to a request for further comment.