Houston bank first to settle allegations of false PPP lending

Prosperity Bank, based in Houston, has become the first US bank to settle claims arising out of the Paycheck Protection Program (PPP). It has agreed to pay $18,674 arising from a $213,400 PPP loan made to Woodlands Pain Institute.



The PPP application included a question asking whether the applicant is subject to an indictment or is facing criminal charges. At the time of his application, Dr. Emad Bishai was the sole owner of Woodlands Pain Institute. He checked the box marked ‘No’ even though he was facing criminal charges in Montgomery County.

Prosperity Bank employees knew Bishai was facing charges and was therefore ineligible to apply for the PPP loan. They processed his application anyway. Prosperity Bank received a 5% processing fee of $10,670.

Bishai entered into a $0.5 million settlement in November 2021 to resolve his liability arising from fraudulent medical billing and his submission of the PPP loan application. He also repaid the PPP loan in full in 2022.

https://www.justice.gov/usao-sdtx/pr/first-ever-false-claims-act-settlement-received-paycheck-protection-program-lender

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