Catching A COVID-19-Era Fugitive and More COVID-19-Related Fraud Enforcement Actions

Posted July 30, 2026

By the Constantine Cannon Whistleblower Team

Over the last few weeks, the government has announced a slew of COVID-19-related fraud enforcement actions. We’re diving into the recent stream of activity and what this could indicate in terms of the government’s future enforcement priorities.

Several of the cases we’re reporting on were initiated by whistleblowers (or relators) under the qui tam (or whistleblower provisions) of the False Claims Act. The alleged schemes involved healthcare fraud, fraudulently obtaining emergency funding from Paycheck Protection Program (PPP) loans, fraudulent billings, and more.

Here are some highlights:

Magnolia Diagnostics, Owners, and Investors Pay $24M to Resolve COVID-19 Testing Fraud Allegations

Texas-based clinical laboratory, Magnolia Diagnostics, and its owners, John Bains and Kelly Bains, agreed to pay the government $19.2 million to resolve allegations that they violated the False Claims Act by billing Medicare for medically unnecessary respiratory pathogen panel tests performed on seniors receiving COVID-19 tests.

Magnolia investors will also pay $4.8 million to resolve common law claims for unjust enrichment and payment by mistake and claims under the Federal Debt Collection Procedures Act, from distributions received from Magnolia.[1]

CAN USA, Inc. Settles Allegations Regarding Receiving Improper CARES Act Loans for Over $2.9 Million

CAN USA, Inc., a company with offices in Louisiana and New Jersey, offers inspection, repair and maintenance services. It entered into a settlement agreement with the government to resolve allegations that the company violated the False Claims Act by taking a $2 million PPP loan it was neither eligible for nor entitled to, due to the number of employees totaling over 300 working for the applicant’s affiliates.

The Coronavirus Aid, Relief, and Economic Security Act (CARES) provided support to eligible small businesses in the form of forgivable loans during COVID-19. To be eligible for the emergency funding, businesses were required to have fewer than 300 employees, including their affiliated entities.

CAN USA cooperated with the investigation, and according to the settlement, CAN USA will pay the United States $2,916,900. This case was originated by a whistleblower, who will receive $291,690 as the reward.[2]

Matrix Metals LLC Agrees to Pay $1.1M+ to Resolve False Claims Act Allegations

On July 23, the United States Attorney’s Office for the Southern District of Texas announced that a stainless steel components supplier, Matrix Metals LLC, has agreed to pay $1,175,529 to settle allegations of fraudulently obtaining a PPP loan for which it was not eligible.

At the time the company applied for the loan, the company allegedly exceeded the employee threshold for eligibility with its affiliated entities.[3]

This case was initiated by a whistleblower, who will receive an undisclosed amount of the recovery.

Longchamp Enters Settlement for Improper PPP Loan

On July 21, the U.S. Attorney’s Office, District of New Jersey announced that Longchamp USA, Inc. (Longchamp), a manufacturer and distributor of fashion and leather products, entered into a settlement agreement with the United States resolving allegations that the company violated the False Claims Act by applying for and receiving a $1,379,972 PPP loan for which it was not eligible.[4]

Including its affiliates and foreign employees, Longchamp had over 300 employees. Longchamp obtained the loan, then sought and received forgiveness of the total amount plus accrued interest. The United States also paid an associated lender a processing fee of $41,399.[5]

Longchamp fully cooperated with the investigation and settlement. Under the agreement, it paid the United States $1,997,110. The settlement resolved a whistleblower lawsuit brought under the False Claims Act. In this case, the relator received $199,710.[6]

Most Wanted COVID-19 Fraud Fugitive Charged in $32 Million Scheme

In July 2026, Elaine Escoe, a fugitive on the FBI’s Most Wanted Fraudsters List, was returned to the States from Jamaica and will face federal charges for her alleged role in a scheme that fraudulently obtained over $32 million in COVID-19 relief funds.

In 2025, Escoe was charged by indictment with conspiracy to commit wire fraud, conspiracy to commit money laundering, and multiple counts of wire fraud and money laundering. A federal arrest warrant was issued in May 2025. Escoe failed to appear at her court date and went to Jamaica. The FBI received a tip about Escoe’s whereabouts, which led to her arrest.[7]

What Did the Alleged Scheme Include?

Escoe and her co-conspirators (who were previously charged) allegedly submitted or caused the submission of fraudulent claims seeking over $32 million in PPP, Restaurant Revitalization Fund (RRF), Shuttered Venue Operators Grant (SVOG), and Economic Injury Disaster Loan (EIDL) funds. The applications falsely represented the existence, payroll, revenue, and operations of purported businesses to qualify for and maximize federal relief funding.[8]

Some applications were filed for businesses the conspirators controlled. Others were filed for third parties who paid large kickbacks, sometimes up to half of the loan money. The conspirators then laundered the fraud proceeds among themselves.[9]

Who Else Has Been Found on the Most Wanted Fraudsters List?

Escoe is yet another individual who was recently located after being named on the government’s Most Wanted Fraudsters List. In June, another alleged fraudster, Herb Kimble, a fugitive in a $1.2 billion telemedicine and durable medical equipment scheme and part of the 2026 National Health Care Fraud Takedown, was detained in the Philippines.[10]

Our Firm Helps COVID-19 Fraud Whistleblowers

The government is still prosecuting COVID-19-related fraud and relies on whistleblowers to speak up with any information. As a reward for successful enforcement actions, eligible whistleblowers may receive up to 30% of the government’s recovery.

Constantine Cannon attorney Ginger Buck commented: “Whistleblowers can help expose COVID-19-related fraud schemes that misuse government funds and undermine programs meant to support individuals and businesses during a crisis.”

If you think you might have a case, please contact us and we will connect you with a whistleblower attorney to evaluate your potential matter.