Home Healthcare Company and its Owner Pay $1.2M to Resolve False Claims Act Allegations Related to COVID-19 Pandemic Relief Loans

CONCORD - The U.S. Attorney for the District of New Hampshire, Erin Creegan announces that Jean-Paul Karangwa and Caring Bees Healthcare, Inc., (Caring Bees) have paid $1,200,000 to resolve allegations that Karangwa and Caring Bees violated the False Claims Act by misusing Economic Injury Disaster Loan (EIDL) and a Paycheck Protection Program (PPP) loan.

Congress created the PPP and EIDL programs to provide emergency financial assistance to Americans suffering from the economic effects of the COVID-19 pandemic. Under the PPP, eligible businesses could receive forgivable loans guaranteed by the Small Business Administration (SBA). The EIDL program provided low interest loans from the SBA to allow small businesses to maintain their operations during shutdowns and other economic circumstances caused by the pandemic. PPP and EIDL funds were to be used solely to cover legitimate business expenses, such as payroll costs, rent, and utilities. PPP and EIDL funds were not to be used for personal purposes.

The United States contends that Karangwa and Caring Bees violated the False Claims Act by misrepresenting their plan to use $200,000 of the EIDL funds and $400,000 of the PPP funds for authorized expenses and to alleviate economic injury but instead, Karangwa used them for personal investments, including in commercial real estate and in a start-up online retailer. He applied for and was granted forgiveness for the PPP loan despite this misuse.

"PPP and EIDL loans were intended to aid Americans and small businesses and shore up the economy amid the fallout from the COVID-19 pandemic," said U.S. Attorney Erin Creegan. "This Office and our law enforcement partners remain committed to protecting and recovering unlawfully obtained taxpayer dollars."

"This settlement resolves allegations that Jean-Paul Karangwa and his home healthcare company drained a government program - implemented amid widespread economic upheaval - for personal gain," said Ted E. Docks, Special Agent in Charge of the FBI's Boston Division. "Anyone who thinks defrauding U.S. taxpayers is a quick way to an easy payday best think again, because the FBI stands very ready to hold you accountable."

Civil Chief Raphael Katz, with the assistance of Assistant U.S. Attorneys Samuel Martin and Alexander Chen, handled this matter. The Federal Bureau of Investigation investigated this case. There was no admission of liability.