A Houston-based regional bank will pay approximately $18,700 to resolve allegations it processed a Paycheck Protection Program (PPP) loan for an ineligible recipient in what is believed to be a landmark False Claims Act settlement.

Prosperity Bank, which holds $37.4 billion in assets across more than 270 banking locations in Texas and Oklahoma, processed a $213,400 PPP loan in May 2020 for a customer that bank employees knew was facing criminal charges, according to a press release issued Tuesday by Jennifer Lowery, U.S. attorney for the Southern District of Texas.

The bank received a $10,670 fee “to which it was not entitled” for processing the improper loan, the press release said.

PPP loans were issued to struggling businesses by the U.S. government in 2020 as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The loans would be forgiven if certain conditions were met.

The PPP loan processed by Prosperity Bank was issued to Dr. Emad Bishai, the sole owner of Woodlands Pain Institute. Bishai checked “no” on his PPP loan application and initialed his name beneath the question when asked if he was subject to indictment, criminal information, arraignment, or other means for which criminal charges could be brought. Bank employees knew Bishai was facing criminal charges in Montgomery County “arising from his practice of prescribing opioid medicines” but processed the loan anyway, the press release said.

Bishai entered into an approximately $523,000 settlement in November 2021 to resolve his liability arising from fraudulent medical billing and his submission of the PPP loan application. He repaid the PPP loan in full in 2022, according to the Justice Department.

The agency said Prosperity Bank cooperated with its investigation, provided relevant facts along the way, and implemented additional compliance measures.

Prosperity Bank did not respond to a request for comment.