The brazen COVID funds fraud perpetrated by Michael Kirouac saw over $1 million in pandemic relief funds diverted to personal enrichment, leaving taxpayers footing the bill. Michael Kirouac, a 38-year-old New Hampshire man, has been sentenced to 15 months in federal prison for fraudulently obtaining and misusing over $1 million in COVID-19 relief funds, using a significant portion to purchase a golf course.
The Story of Michael Kirouac’s Deception
Michael Kirouac owned or controlled four companies: HK Manchester, HK Loudon, HK Hudson, and HK Pelham. Exploiting the Coronavirus Aid, Relief, and Economic Security (CARES) Act, Kirouac applied for and received Economic Injury Disaster Loans (EIDL) for these companies. The CARES Act, intended to provide financial assistance during the pandemic, included the Paycheck Protection Program (PPP) and the EIDL program, both designed to help businesses cover payroll and other essential expenses. Kirouac falsely claimed that the loan proceeds would be used solely for working capital and not for personal expenses or relocation.
How the Scheme Worked
Kirouac’s scheme began to take shape in 2021 when he sought to purchase the Angus Lea Golf Course in Hillsborough, New Hampshire. Unable to secure traditional financing from banks or private lenders, he turned to the EIDL program. He fraudulently obtained EIDLs on behalf of HK Manchester and HK Loudon, diverting approximately $600,000 of these funds, earmarked for business expenses, to help finance the golf course purchase. He also misused EIDL funds obtained for HK Pelham.
“The defendant stole over a million dollars from taxpayers amidst one of the worst health and economic crises in a century,” said Erin Creegan, U.S. Attorney for the District of New Hampshire.
The Victims and the Impact of COVID Funds Fraud
The primary victims of Kirouac’s COVID funds fraud are the American taxpayers, who ultimately bear the burden of such schemes. These funds were intended to support businesses and individuals struggling during the pandemic, providing a lifeline during a critical time. Kirouac’s actions diverted these resources, potentially depriving legitimate businesses of much-needed assistance. The Small Business Administration (SBA) was also deceived, relying on Kirouac’s false statements when approving the EIDL loans. related fraud investigations
Unraveling the Deception
The investigation into Kirouac’s COVID funds fraud was a collaborative effort involving multiple federal agencies. The Department of Veterans Affairs’ Office of the Inspector General, IRS Criminal Investigations, and SBA’s Office of the Inspector General, with assistance from the Department of Justice’s Money Laundering, Narcotics and Forfeiture Section, worked together to uncover the scheme. Their investigation revealed the discrepancies between Kirouac’s loan applications and his actual use of the funds. Separately, Kirouac obtained a $260,500 EIDL for HK Hudson after agreeing to sell the company to a third party, failing to disclose this fact to the SBA.
Consequences and Justice Served
As a result of the investigation, Michael Kirouac was charged with wire fraud and pleaded guilty in October. U.S. District Judge Joseph Laplante sentenced Kirouac to 15 months in prison and one year of supervised release. While the sentence may seem lenient to some, it sends a clear message that such fraudulent activities will not be tolerated. The U.S. Attorney’s Office for the District of New Hampshire has vowed to continue aggressively pursuing those who defraud pandemic relief programs.
Lessons Learned and Red Flags to Watch For
This case highlights the importance of vigilance and oversight in government relief programs. While these programs are crucial for providing assistance during times of crisis, they are also vulnerable to fraud. Red flags to watch for include: sudden applications for loans without a clear business need, discrepancies between loan applications and actual business activities, and attempts to conceal financial transactions. Stricter verification processes and increased transparency can help prevent similar schemes in the future.
Source: NBC Boston
