Settlement agreement: United States and Caribe Holdings Cayman and PuraCap International (PPP)
Summary
A settlement agreement among the United States (acting through the Department of Justice on behalf of the Small Business Administration), Caribe Holdings Cayman, PuraCap International LLC, and GNGH2, Inc. as Relator. The United States contends that Caribe applied for a PPP loan on or about March 4, 2021, and certified that no entity organized under the laws of the People's Republic of China owned not less than 20 percent of its economic interest, when in fact such an entity did; SBA approved a loan totaling $1,200,900. Caribe agrees to pay $1,991,038, of which $1,244,399 is restitution, and the United States is to pay the Relator $199,103. The agreement states it is neither an admission of liability by Caribe or PuraCap nor a concession by the United States or the Relator.
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“Settlement agreement: United States and Caribe Holdings Cayman and PuraCap International (PPP).”
Original at www.justice.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/settlement-agreement-united-states-and-caribe-holdings-cayman-and-pura-49a6025ce6/
, SHA-256 96e174b186e1c58a9f6b397503e77853b0217b62a3627e108d4e751ad52e9776.Full text
SETTLEMENT AGREEMENT
This Settlement Agreement (Agreement) is entered into among the
United States of America, acting through the United States Department of
Justice and on behalf of the United States Small Business Administration,
Caribe Holdings Cayman Co. Ltd. (“Caribe”), PuraCap International LLC
(“PuraCap”), and GNGH2, Inc. (“Relator”) (hereafter collectively referred to
as “the Parties”), through their authorized representatives.
RECITALS
A. Caribe Holdings Cayman Co. Ltd.(“Caribe”) is a pharmaceutical
manufacturer with a principal place of business at Road 698 Km 0.8, Barrio
Mameyal, Dorado, Puerto Rico 00646. Caribe maintains corporate
headquarters at 100 Somerset Corp. Blvd., Suite 300, Bridgewater, NJ 08807.
PuraCap International LLC (“PuraCap”) is a Delaware limited liability
company with a registered office at 2711 Centerville Road, Suite 400,
Wilmington, Delaware, 19808; it is a holding company that owns 100% of the
shares of Caribe.
B. On or about April 12, 2023, Relator filed a qui tam action in the
United States District Court for the District of New Jersey captioned United
States ex rel. GNGH2, Inc. v. PuraCap International LLC, et al., Civil Action
No. 23-2068, pursuant to the qui tam provisions of the False Claims Act, 31
U.S.C. § 3730(b) (the “Civil Action”).
C. The United States contends that it has certain civil claims
against Caribe arising from the facts and conduct described in this
paragraph:
(i) On or about March 4, 2021, Caribe applied for a loan pursuant
to the Paycheck Protection Program (“PPP”) under the
Coronavirus Aid, Relief, and Economic Security Act (“CARES
Act”).
(ii) In submitting the PPP loan application, Caribe certified that it
“is not a business concern or entity [ ] for which an entity
created in or organized under the laws of the People’s Republic
of China . . . or that has significant operations in the People’s
Republic of China . . . owns or holds, directly or indirectly, not
less than 20 percent of the economic interest of the business
concern or entity, including as equity shares or a capital or
profit interest in a limited liability company or partnership.”
(iii) At the time Caribe submitted the application, it was, in fact, “a
business concern or entity [ ] for which an entity created in or
organized under the laws of the People’s Republic of China . . . or
that has significant operations in the People’s Republic of China
. . . owns or holds, directly or indirectly, not less than 20 percent
of the economic interest of the business concern or entity,
including as equity shares or a capital or profit interest in a
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limited liability company or partnership.” Caribe would not have
qualified for the PPP loan if it answered the question accurately.
(iv) On or about March 31, 2021, and based on Caribe’s application,
SBA approved a PPP loan to Caribe totaling $1,200,900. In
connection with the PPP loan, SBA also paid a loan processing
fee to the lender totaling approximately $36,027, and interest on
the PPP loan of approximately $7,472.
That conduct is referred to below as the Covered Conduct.
D. Relator claims entitlement under 31 U.S.C. § 3730(d) to a share
of the proceeds of this Settlement Agreement.
E. This Settlement Agreement is neither an admission of liability
by Caribe or PuraCap, nor a concession by the United States or the Relator
that their claims are not well founded.
To avoid the delay, uncertainty, inconvenience, and expense of
protracted litigation of the above claims, and in consideration of the mutual
promises and obligations of this Settlement Agreement, the Parties agree and
covenant as follows:
TERMS AND CONDITIONS
1. Caribe shall pay to the United States one million, nine-hundred
ninety-one thousand and thirty-eight dollars ($1,991,038) (“Settlement
Amount”), of which one million, two hundred forty-four thousand, three
hundred ninety-nine dollars ($1,244,399) is restitution, by electronic funds
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transfer pursuant to written instructions to be provided by the United States
Attorney’s Office for the District of New Jersey. The date that all of the
parties have signed agreement is the “Effective Date of the Agreement.”
Caribe shall pay the Settlement Amount within 30 days of the Effective Date
of the Agreement.
2. Conditioned upon the United States receiving the Settlement
Amount and as soon as feasible after receipt, the United States shall pay one
hundred, ninety-nine thousand, one hundred and three dollars ($199,103) to
Relator by electronic funds transfer (Relator’s Share).
3. Relator agrees to waive—and hereby waives—any claim for
attorney’s fees and/or costs, whether under 31 U.S.C. § 3730(d) or otherwise,
on Relator’s own behalf and for any party claiming under or through Relator.
4. Subject to the exceptions in Paragraph 6 (concerning reserved
claims) and Paragraph 7 (concerning default), below, and upon the United
States’ receipt of the Settlement Amount, the United States releases Caribe
and PuraCap from any civil or administrative monetary claim the United
States has for the Covered Conduct under the False Claims Act, 31 U.S.C. §§
3729-3733; the Program Fraud Civil Remedies Act, 31 U.S.C. §§ 3801-3812 or
the common law theories of breach of contract, payment by mistake, unjust
enrichment, and fraud.
5. Subject to the exceptions in Paragraph 6 below, and upon the
United States’ receipt of the Settlement Amount, Relator, for himself and for
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his/her heirs, successors, attorneys, agents, and assigns, forever and
irrevocably, releases Caribe and PuraCap and their respective directors,
officers, employees and advisors from any civil monetary claim the Relator
has on behalf of the United States for the Covered Conduct under the False
Claims Act, 31 U.S.C. §§ 3729-3733.
6. Notwithstanding the releases given in Paragraph 4 of this
Agreement, or any other term of this Agreement, the following claims and
rights of the United States are specifically reserved and are not released:
a. Any liability arising under Title 26, U.S. Code (Internal
Revenue Code);
b. Any criminal liability;
c. Except as explicitly stated in the Agreement, any
administrative liability or enforcement right, or any
administrative remedy, including the suspension and
debarment rights of any federal agency;
d. Any liability to the United States (or its agencies) for any
conduct other than the Covered Conduct;
e. Any liability based upon obligations created by this
Agreement; or
f. Any liability of individuals.
7. Relator and his heirs, successors, attorneys, agents, and assigns
shall not object to this Agreement but agree and confirm that this Agreement
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is fair, adequate, and reasonable under all the circumstances, pursuant to 31
U.S.C. § 3730(c)(2)(B). Conditioned upon Relator’s receipt of the Relator’s
Share, Relator and his heirs, successors, attorneys, agents, and assigns fully
and finally release, waive, and forever discharge the United States, its
agencies, officers, agents, employees, and servants, from any claims arising
from the filing of the Civil Action or under 31 U.S.C. § 3730, and from any
claims to a share of the proceeds of this Agreement and/or the Civil Action.
8. Relator, for himself, and for his heirs, successors, attorneys,
agents, and assigns, forever and irrevocably, releases Caribe and PuraCap,
and their respective directors, officers, employees and advisors, from any
liability to Relator arising from the filing of the Civil Action, or under 31
U.S.C. § 3730(d) for expenses or attorneys’ fees and costs.
9. Caribe and PuraCap waive and shall not assert any defenses
they may have to any criminal prosecution or administrative action relating
to the Covered Conduct that may be based in whole or in part on a contention
that, under the Double Jeopardy Clause in the Fifth Amendment of the
Constitution, or under the Excessive Fines Clause in the Eighth Amendment
of the Constitution, this Agreement bars a remedy sought in such criminal
prosecution or administrative action.
10. Caribe and PuraCap fully and finally release the United States,
its agencies, officers, agents, employees, and servants, from any claims
(including attorneys’ fees, costs, and expenses of every kind and however
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denominated) that Caribe and PuraCap have asserted, could have asserted,
or may assert in the future against the United States, its agencies, officers,
agents, employees, and servants, related to the Covered Conduct or the
United States’ investigation or prosecution thereof.
11. Caribe and PuraCap fully and finally release the Relator from
any claims (including attorneys’ fees, costs, and expenses of every kind and
however denominated) that Caribe and PuraCap have asserted, could have
asserted, or may assert in the future against the Relator, related to the
Covered Conduct and the Relator’s investigation and prosecution thereof.
12. a. Unallowable Costs Defined: All costs (as defined in the
Federal Acquisition Regulation, 48 C.F.R. § 31.205-47) incurred by or on
behalf of Caribe or PuraCap, and their present or former officers, directors,
employees, shareholders, and agents in connection with:
(1) the matters covered by this Agreement;
(2) the United States’ audit(s) and civil investigation(s)
of the matters covered by this Agreement;
(3) Caribe’s investigation, defense, and corrective
actions undertaken in response to the United
States’ audit(s) and civil investigation(s) in
connection with the matters covered by this
Agreement (including attorneys’ fees);
(4) the negotiation and performance of this Agreement;
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(5) the payment Caribe makes to the United States
pursuant to this Agreement and any payments that
Caribe may make to Relator, including costs and
attorneys fees,
are unallowable costs for government contracting purposes (hereinafter
referred to as Unallowable Costs).
b. Future Treatment of Unallowable Costs: Unallowable
Costs will be separately determined and accounted for by Caribe, and Caribe
shall not charge such Unallowable Costs directly or indirectly to any contract
with the United States.
c. Treatment of Unallowable Costs Previously Submitted for
Payment: Within 90 days of the Effective Date of this Agreement, Caribe
shall identify and repay by adjustment to future claims for payment or
otherwise any Unallowable Costs included in payments previously sought by
Caribe or any of its subsidiaries or affiliates from the United States. Caribe
agrees that the United States, at a minimum, shall be entitled to recoup from
Caribe any overpayment plus applicable interest and penalties as a result of
the inclusion of such Unallowable Costs on previously-submitted requests for
payment. The United States, including the Department of Justice and/or the
affected agencies, reserves its rights to audit, examine, or re-examine
Caribe’s books and records and to disagree with any calculations submitted
by Caribe or any of its subsidiaries or affiliates regarding any Unallowable
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Costs included in payments previously sought by Caribe, or the effect of any
such Unallowable Costs on the amount of such payments.
13. This Agreement is intended to be for the benefit of the Parties
only.
14. Upon receipt of the payment described in Paragraph 1 above,
the Relator and the United States shall promptly sign and file in the Civil
Action a Joint Stipulation of Dismissal of the Civil Action pursuant to Rule
41(a)(1).
15. Each Party shall bear its own legal and other costs incurred in
connection with this matter, including the preparation and performance of
this Agreement.
16. Each Party and signatory to this Agreement represents that it
freely and voluntarily enters into this Agreement without any degree of
duress or compulsion.
17. This Agreement is governed by the laws of the United States.
The exclusive jurisdiction and venue for any dispute relating to this
Agreement is the United States District Court for the District of New Jersey.
For purposes of construing this Agreement, this Agreement shall be deemed
to have been drafted by all Parties to this Agreement and shall not, therefore,
be construed against any Party for that reason in any subsequent dispute.
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18. This Agreement constitutes the complete agreement between
the Parties. This Agreement may not be amended except by written consent
of the Parties.
19. The undersigned counsel represent and warrant that they are
fully authorized to execute this Agreement on behalf of the persons and
entities indicated below.
20. This Agreement may be executed in counterparts, each of which
constitutes an original and all of which constitute one and the same
Agreement.
21. This Agreement is binding on Caribe’s and PuraCap’s
successors, transferees, heirs, and assigns.
22. This Agreement is binding on Relator’s successors, transferees,
heirs, and assigns.
23. All parties consent to the United States’ disclosure of this
Agreement, and information about this Agreement, to the public.
24. This Agreement is effective on the date of signature of the last
signatory to the Agreement. Facsimiles of signatures shall constitute
acceptable, binding signatures for purposes of this Agreement.
[remainder of page intentionally blank]
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THE UNITED STATES OF AMERICA
Digitally signed by DAVID
DAVID SIMUNOVICH SIMUNOVICH
DATED: 02/12/2024 BY: ______________________________
Date: 2024.02.12 09:25:13 -05'00'
David V. Simunovich
Assistant United States Attorney
Healthcare Fraud Unit
U.S. Attorney’s Office
District of New Jersey
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CARIBE HOLDINGS CAYMAN CO LTD-DEFENDANT
BY:-~---;-+--~
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--_·•• ____
Qianlun Li
Authorized Representative
Caribe Holdings Cayman Co. Ltd
Road 698 Km 0.8
Barrio Mameyal
Dorado, PR 00646
PURACAP INTERNATIONAL LLC - DEFENDANT
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BY: !Z)llfll'V h
Qianlun Li
. Authorized Representative
PuraCap International LLC
2711 Centerville Road, Suite 400
Wilmington, Delaware, 19808
DATEo:z.\,Jz.'1 BY,
Christophe~
~
Wilmer Cutler Pickering Hale and Dorr LLP
2100 Pennsylvania Ave. NW
Washington, DC 20037
Counsel for Caribe Holdings Cayman Co. Ltd and
PuraCap International LLC
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GNGH2, Inc. - RELATOR
DATED:
2/9/2024 r s
-c_
BY: _____________________________
David Abrams, Esq.
GNGH2, Inc.
Relator
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