Businesswoman in Louisiana Pleads Guilty in CARES Act Fraud Scheme After Fraudulently Receiving $678k+ in Funds

Shreveport, Louisiana. – United States Attorney Brandon B. Brown announced that Janola Massaquoi, 41, of Shreveport, Louisiana, pleaded guilty on September 1, 2022, before Chief United States District Judge S. Maurice Hicks, Jr. to making false statements to a federal agency.

In March 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was intended to offer emergency financial help to millions of Americans affected by the COVID-19 epidemic. As part of the CARES Act, the Small Business Administration (SBA) made Economic Injury Disaster Loans (EIDL) available to small businesses, renters, and homeowners in disaster-affected areas. The CARES Act also authorized up to $349 billion in forgiven loans to small firms for job retention and certain other expenses, via the Paycheck Protection Program (“PPP”).

Massaquoi founded the Jane Elizabeth Education Group (JEEG) in 2018 and also worked as the president of a beauty profession training company, according to evidence produced in court. In 2020, Massaquoi applied to the SBA for an EIDL under the name JEEG d/b/a Company 1 in order to receive roughly $500,000 in EIDL Program money. At the same time, she sought a $178,750 PPP loan in the name of JEEG d/b/a Company 1.

Massaquoi electronically submitted to the SBA a Loan Authorization and Agreement on or about April 20, 2020, as part of the EIDL application process, 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 further confirmed that the loan funds would be used strictly for JEEG’s operating capital.

Both loan applications were later granted. The SBA disbursed roughly $500,000 in EIDL benefits to a bank account maintained by Company 1 based on Massaquoi’s substantial misrepresentations in the fraudulent Loan Authorization and Agreement. On April 23, 2020, about $178,750 in PPP loan benefits were disbursed to Company 1’s bank account.

Massaquoi, unbeknownst to the SBA, intended to make a significant advance directly to herself and did not intend to use the EIDL monies only for JEEG’s working capital. Massaquoi transferred cash from Company 1’s bank account to other bank accounts she personally controlled after receiving the loan benefits and utilized the funds for a range of personal needs, including a down payment on the purchase of a personal residence and mortgage payments. Massaquoi also took out more than $30,000 in cash, transferred more than $50,000 to friends and family members, and spent over $83,000 to fund her own investment and retirement accounts. Massaquoi spent $250,000 of the EIDL profits for 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 could face up to 5 years in jail, 3 years of supervised release, and a fine of up to $250,000. The date for sentencing has been scheduled for January 11, 2023.

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

The Attorney General established the COVID-19 Fraud Enforcement Task Force on May 17, 2021, to marshal the Department of Justice’s resources in collaboration with agencies across the government to strengthen efforts to combat and prevent pandemic-related fraud. The Task Force assists agencies tasked with administering relief programs to prevent fraud by, among other things, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. Follow this link for more information on the Department of Justice’s response to the pandemic.

Anyone with information about allegations of attempted fraud involving COVID-19 should contact the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or fill out the NCDF Web Complaint Form by following this link.