Kris Agency & Home Care, Inc. and Career Development Center of Queens, Inc., both based in Queens, have agreed on May 19 to pay $2,347,133.10 to the United States as part of a settlement addressing allegations that they violated the federal False Claims Act by fraudulently obtaining and seeking forgiveness for two second-draw Paycheck Protection Program loans.
The case matters because it highlights government efforts to ensure pandemic relief funds were used properly and that those who misused these programs are held accountable.
United States Attorney Joseph Nocella, Jr. said, “The Paycheck Protection Program was meant to help struggling small businesses survive the COVID-19 pandemic by offering loans that could be forgiven if program rules were followed. As alleged, Kris Agency and Career Development Center took government money to which they were not entitled. Our Office will continue to hold accountable those who misused pandemic aid programs.”
SBA General Counsel Wendell Davis said, “SBA is committed to identifying and pursuing those alleged to have perpetrated fraud on COVID Relief Programs to the detriment of small businesses. By working closely with the U.S. Attorney’s Office in the Eastern District of New York and our other law enforcement partners, SBA continues its enhanced efforts to uncover fraud and pursue recoveries on behalf of taxpayers.”
According to the announcement, Kris Agency and Career Development Center falsely certified their eligibility for second-draw PPP loans by stating they had fewer than 300 employees—including all affiliates—and failed to disclose each other as affiliates when applying for loan forgiveness.
The civil settlement resolves a case brought under the qui tam provisions of the False Claims Act (FCA), which allows private parties or whistleblowers to sue on behalf of the United States government and potentially receive a share of any recovery. The FCA also allows federal authorities such as the United States Attorney’s Office—who intervened in this case—to take over lawsuits initiated under these provisions.
Officials noted that claims against Kris Agency and Career Development Center are allegations only; there has been no determination of liability.
