The United States Attorney’s Office has announced that William Philip Werschler, a 66-year-old dermatologist from Spokane, Washington, along with his businesses—Spokane Dermatology Clinic, Premier Clinical Research L.L.C., and 3rd and Sherman Plaza L.L.C.—has agreed to pay $1.4 million to settle claims under the False Claims Act. The claims are related to the alleged misuse of funds intended for businesses struggling during the COVID-19 pandemic.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020. This act provided several programs for eligible small businesses to receive relief funding aimed at mitigating the economic impact of the pandemic. One such program was the Economic Injury Disaster Loan (EIDL) program, which offered low-interest loans that could be deferred until after the pandemic. These funds were meant to serve as “bridge” funding for small businesses to continue operations during shutdowns and other pandemic-related economic challenges. EIDL funds were designated solely for working capital needs like payroll, health insurance premiums, rent, utilities, and fixed debt payments. They were not permitted for personal use or real estate purchases.
According to the settlement agreement with authorities, Werschler applied for EIDL loans starting no later than April 2020 through at least July 2022 for his various business entities.
Following receipt of these funds, Werschler made personal acquisitions including a 2011 Porsche 911 GT3 and a 1997 Porsche Carrera totaling $252,375. Additionally, he spent $553,143 on purchasing two properties near his Spokane Dermatology Clinic. Both expenditures violated EIDL fund usage guidelines by being used for personal automobiles and real estate purchases.
The case investigation involved collaboration between IRS Criminal Investigations, the FBI, and the Small Business Administration Office of Inspector General.
A link to view the full settlement agreement is available in the announcement.
