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Washington Man Pleads Guilty to Stealing more than $2 million in PPP Loans

A 43-year-old D.C. man pleaded responsible to fraudulently acquiring greater than $2 million in federal Paycheck Safety Program (PPP) loans and Financial Harm Catastrophe Loans (EIDL).

In accordance with a press launch from america Lawyer’s Workplace D.C., Kenneth Gaughan of Washington, D.C., additionally admitted to embezzling one other $438,000 in funds from the Catholic Archdiocese of Washington, D.C., the place he was beforehand employed as Assistant Superintendent.

Officers mentioned Gaughan would typically use an alias of Richard Strauski to focus on federal funds from at the very least March 2020 via August 2020. In accordance with the federal government’s proof, Gaughan sought tens of millions in PPP loans on behalf of 9 corporations. He acquired $2.1 million in PPP and EIDL funds.

PPP loans have been created via the Coronavirus Support, Aid, and Financial Safety (CARES) Act. The loans have been meant for use by companies and organizations for payroll prices, curiosity on mortgages, lease and utilities through the COVID pandemic. EIDL loans have been a part of a program run by the Small Enterprise Administration. They have been designed to assist companies and organizations dealing with hardship in 2020.

Within the case of embezzlement, officers mentioned Gaughan admitted to defrauding the Archdiocese of Washington of greater than $438,000.

Gaughan labored for the Archdiocese as its Director of Counseling beginning in 2008 and was later promoted to Assistant Superintendent.

Starting in at the very least June 2010, officers say Gaughan precipitated the Archdiocese to pay invoices manufactured by Gaughan purportedly for anti-bullying and disaster intervention packages, in addition to for software program used to ship mass messages to Archdiocese college students and households. He would then conceal his possession and management of the three corporations, utilizing an alias.

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Officers say Gaughan used the cash from the 2 packages, partly, to purchase a $300,000 yacht, a $1.13 million rowhouse in Northeast, Washington and a $46,000 luxurious sports activities sedan.

“Whereas small companies have been struggling to remain afloat, Kenneth Gaughan stole taxpayer {dollars} to fund his lavish life-style, residence, automotive, and yacht,” mentioned U.S. Lawyer Graves. “These emergency funds have been meant to assist our small companies climate the COVID-19 pandemic, not line the pockets of fraudsters. But this defendant openly undertook his scheme even after stealing lots of of hundreds of {dollars} from his former faith-based employer.”

Gaughan was arrested for fraud on Aug. 11, 2020. He pleaded responsible within the U.S. District Courtroom for the District of Columbia to 1 rely of wire fraud and one rely of cash laundering within the PPP and EIDL case, and one rely of wire fraud within the case involving the Archdiocese.

“Mr. Gaughan was so emboldened by deceiving a church for a number of years he then turned his deception to the federal government, stealing funds that have been meant to be a lifeline for struggling companies and greedily utilizing them to fulfill his personal materialistic wishes,” mentioned FBI Particular Agent in Cost Sobocinski. “The FBI, and our legislation enforcement companions, will proceed to diligently examine these crimes of fraud and maintain these people accountable.”

Gaughan is scheduled to be sentenced on June 15, 2022. The wire fraud cost carries a statutory most of 20 years in jail. and the cash laundering cost carries a most of 10 years in jail.

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Gaughan can be required to pay restitution for the PPP and EIDL fraud within the quantity of $2,182,465 and to the Archdiocese within the quantity of $438,200, in addition to a forfeiture cash judgment.

Owners say properties’ foundations are unstable resulting in harmful cracks, water harm and mildew.

 

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