Queens Home Care Agency and Home Health Aide Training Center to Pay $2.3 Million to Settle Claims That They Defrauded Paycheck Protection Program

Joseph Nocella, Jr., United States Attorney for the Eastern District of New York, announced today a settlement agreement with Queens-based home care agency Kris Agency & Home Care, Inc. (Kris Agency), and training center Career Development Center of Queens, Inc. (Career Development Center). The settlement agreement addressed allegations that Kris Agency and Career Development Center violated the federal False Claims Act (FCA) when they applied for two pandemic-era second-draw paycheck protection program (PPP) loans and obtained forgiveness of those loans.

"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," stated United States Attorney Nocella. "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."

United States Attorney Nocella thanked the Small Business Administration (SBA) for its partnership in the investigation.

"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," stated SBA General Counsel Wendell Davis.

On March 27, 2020, the President signed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to provide emergency assistance for individuals, families, and businesses affected by the coronavirus pandemic. The CARES Act authorized the Paycheck Protection Program, administered by the SBA, to provide forgivable loans to eligible small businesses during the national emergency. The PPP provided loans in two draws. For second-draw PPP loans, among other requirements, an applicant could not employ more than 300 employees, including all employees of its affiliates.

The United States Attorney's Office commenced an investigation after whistleblowers alleged that Kris Agency had knowingly defrauded the federal government by obtaining a PPP loan and loan forgiveness when it was not eligible. The government's investigation determined that Kris Agency and Career Development Center falsely certified that they, including affiliates, had fewer than 300 employees, and failed to disclose each other as affiliates.

Under the terms of the agreements with the United States, Kris Agency and Career Development Center have agreed to pay $2,347,133.10 to the United States. The claims asserted against Kris Agency and Career Development Center are allegations only and there has been no determination of liability.

The civil settlement resolves a case brought under the qui tam provisions of the FCA. The FCA authorizes private parties to sue on behalf of the United States and receive a share of any recovery. It also permits the United States to intervene and take over such lawsuits, as it did here.

The case is being handled by Assistant U.S. Attorney Logan J. Gowdicott and Special Assistant U.S. Attorney Franka Cepele of the Office's Civil Division, with assistance from Paralegal Specialists Loan Nguyen and Jude Glashow.