DSO accused of improperly getting loans pays millions to end case

Dental service organization (DSO) West Coast Dental Administrative Services, its founders, and former owners have agreed to pay $6.3 million to resolve allegations it received improper loans, violating the False Claims Act, according to the U.S. Department of Justice (DOJ).

The California-based DSO, formerly known as West Coast Dental Services, Drs. Soleyman Cohen-Sedgh, Farid Pakravan, and Farhad Manavi have paid the money to resolve the case that involved West Coast Dental and affiliated dental offices receiving loans under the U.S. Paycheck Protection Program (PPP). The emergency loan program established by Congress in March 2020 under the Coronavirus Aid, Relief, and Economic Security (CARES) Act aimed to help struggling businesses during the pandemic, according to a press release dated August 8 by DOJ's Office of Public Affairs.

West Coast Dental and six affiliated dental practices were accused of receiving seven improper second-draw PPP loans and subsequent forgiveness of these loans based on false certifications. However, they were ineligible because the dental practices collectively employed more than 300 individuals. Furthermore, West Coast Dental and its affiliates allegedly failed to disclose common ownership of the affiliates in their separate loan applications.

Additionally, a real estate investment company owned by Manavi, City Real Estate Holdings, has paid an additional $35,149 to resolve its potential liability under the False Claims Act in connection with a separate PPP loan. The company was ineligible to receive a loan because it is a passive business operated for investment purposes, according to the release.

The settlement was resolved under the whistleblower provisions of the False Claims Act filed by California-based company Relator, which allows it to collect some of the recovery. Relator will receive approximately $507,000 as its share of the total settlement.