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Description: Shreveport, Louisiana criminal lawyer represented Defendant charged with making false statements to a federal agency.

In March 2020 Congress enacted the Coronavirus Aid, Relief and Economic Security (CARES) Act which was designed to provide emergency financial assistance to the millions of Americans who were suffering the economic effects caused by the COVID-19 pandemic. As part of the CARES Act, the Small Business Administration (SBA) provided Economic Injury Disaster Loans (EIDL), which were low-interest financing to small businesses, renters and homeowners in regions affected by declared disasters. The CARES Act also provided authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses, through a program referred to as the Paycheck Protection Program (“PPP”).

According to evidence presented to the court, Massaquoi formed the Jane Elizabeth Education Group (JEEG) in 2018 and also served as the president of a beauty career training company. In 2020, Massaquoi applied to the SBA for an EIDL in the name of JEEG d/b/a Company 1 seeking approximately $500,000 in EIDL Program funds. At the same time, she applied for a PPP loan in the name of JEEG d/b/a Company 1 seeking $178,750.

On or about April 20, 2020, as part of the EIDL application process, Massaquoi electronically submitted to the SBA a Loan Authorization and Agreement in which she certified to the SBA that “[JEEG] will not, without the prior written consent of SBA, make any distribution of Borrower’s assets, or give any preferential treatment, make any advance, directly or indirectly, by way of loan, gift, bonus, or otherwise to any owner or partner…” Massaquoi also certified that the loan funds would be used solely as working capital for JEEG.

Both loan applications were subsequently approved. Based on Massaquoi’s material misrepresentations set forth in the false Loan Authorization and Agreement, the SBA disbursed approximately $500,000 in EIDL benefits to a bank account held by Company 1. On April 23, 2020, approximately $178,750 in PPP loan benefits were disbursed to a bank account held by Company 1.

In reality and unbeknownst to the SBA, Massaquoi intended to make a large advance directly to herself and did not intend to use the EIDL funds solely as working capital for JEEG. After obtaining the loan benefits, Massaquoi transferred funds from Company 1’s bank account to other bank accounts she personally controlled and used the funds for a variety of personal expenses including a down payment on the purchase of a personal residence and mortgage payments. Massaquoi also withdrew over $30,000 in cash, transferred over $50,000 to friends and family members, and used approximately $83,000 to fund her personal investment and retirement accounts. In total, Massaquoi used $250,000 of the EIDL proceeds for her personal use.

“This defendant took advantage of taxpayer dollars at one of the most vulnerable times in American history,” stated U.S. Attorney Brandon B. Brown. “Over the last few years, small businesses have struggled to survive during the pandemic. Massaquoi exploited an opportunity given by the government to provide legitimate financial assistance to said businesses. Individuals who commit such fraud will be investigated and ultimately prosecuted. We will continue to work with our federal partners who have allocated their investigative resources toward combating this type of fraud.”

Massaquoi faces a sentence of not more than 5 years in prison, 3 years of supervised release, and a fine of up to $250,000. Sentencing has been set for January 11, 2023.

The case was investigated by the Department of Treasury-Inspector General for Tax Administration and Internal Revenue Service-Criminal Investigation and is being prosecuted by Assistant U.S. Attorney Seth D. Reeg.

18 U.S.C. Section 1001 provides:

(a) Except as otherwise provided in this sec-
tion, whoever, in any matter within the jurisdic-
tion of the executive, legislative, or judicial
branch of the Government of the United States,
knowingly and willfully—
(1) falsifies, conceals, or covers up by any
trick, scheme, or device a material fact;
(2) makes any materially false, fictitious, or
fraudulent statement or representation; or
(3) makes or uses any false writing or docu-
ment knowing the same to contain any mate-
rially false, fictitious, or fraudulent statement
or entry;
shall be fined under this title, imprisoned not
more than 5 years or, if the offense involves
international or domestic terrorism (as defined
in section 2331), imprisoned not more than 8
years, or both. If the matter relates to an of-
fense under chapter 109A, 109B, 110, or 117, or
section 1591, then the term of imprisonment im-
posed under this section shall be not more than
8 years.
(b) Subsection (a) does not apply to a party to
a judicial proceeding, or that party’s counsel,
for statements, representations, writings or doc-
uments submitted by such party or counsel to a
judge or magistrate in that proceeding.
(c) With respect to any matter within the ju-
risdiction of the legislative branch, subsection
(a) shall apply only to—
(1) administrative matters, including a
claim for payment, a matter related to the
procurement of property or services, personnel
or employment practices, or support services,
or a document required by law, rule, or regula-
tion to be submitted to the Congress or any of-
fice or officer within the legislative branch; or
(2) any investigation or review, conducted
pursuant to the authority of any committee,
subcommittee, commission or office of the
Congress, consistent with applicable rules of
the House or Senate.

Outcome: Defendant pleaded guilty.

Plaintiff's Experts:

Defendant's Experts:

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