Texas EMS accused of fraudulently receiving $2.6M COVID-19 relief loan

The federal government claims Hidalgo County EMS submitted an unauthorized modified Paycheck Protection Program loan application and falsely claimed not to be in bankruptcy

By Laura French

HIDALGO COUNTY, Texas — The federal government is accusing a Texas EMS agency of fraudulently receiving a nearly $2.6 million COVID-19 relief loan by falsely stating on an application that the agency was not in bankruptcy. 

Hidalgo County EMS had previously sued the Small Business Administration (SBA), claiming that the Paycheck Protection Program unfairly denied loans to businesses in bankruptcy. The agency was granted an injunction in court allowing it to submit a new application, but while the agency was searching for a bank willing to accept the application, the SBA appealed and the injunction was halted, according to KRGV

The federal government now alleges that Hidalgo County EMS submitted a modified application three days after the injunction allowing them to do so was halted, and also falsely stated on the new application that the agency was not in bankruptcy. A bank accepted the new application and granted the agency a nearly $2.6 million loan. 

A judge ruled against Hidalgo County EMS in its lawsuit against the SBA in June, and the U.S. Attorney's Office has now filed a motion accusing the agency of committing fraud in order to obtain the loan despite losing its suit. The government requested that a judge appoint a Chapter 11 trustee to supervise the agency's bankruptcy process, and also states that the SBA may refuse to forgive the loan that the agency received due to the alleged fraud. 

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