In June 2020, as many businesses struggled to survive, an Abington used-car dealer was given an $836,800 federal pandemic relief loan to pay his 40 employees. Yet, he lied about the size of his workforce, which was only a handful of people, prosecutors allege, and spent most of the money on the purchase of a 14-room “country manor” in South Easton, a $133,000 Rolls Royce, and a French bulldog breeder.
A couple of months later, an Instagram influencer allegedly collected more than $600,000 in COVID-19 relief loans and unemployment benefits by using identities she stole by tapping into the Massachusetts Registry of Motor Vehicles website from her Miami home, then used some of the money to charter a private jet for a trip to California.
And a former Beverly pizzeria owner is accused of using some of his $661,000 in pandemic-relief funds to buy a farm in Vermont, along with several alpacas.
Now, all three recipients of those COVID-19 loans face criminal charges in unrelated cases pending in US District Court in Boston. They were arrested as part of a monumental effort by the Justice Department to crack down on pandemic-related fraud and recover billions of taxpayer dollars that were doled out with few safeguards amid a global crisis.
Criminal charges have been brought nationwide against a dizzying array of suspects, including a former NFL player, a Hollywood producer, a reality TV star, rappers, doctors, preachers, drug dealers, romance scammers, and human traffickers. Many are accused of spending COVID relief funds as if they just hit the lottery on items like Lamborghinis, Teslas, mansions, and cryptocurrency. Former Olympic speed skater Allison Baver is awaiting trial in Utah on charges that she fraudulently obtained $10 million in coronavirus relief money and invested some of it in a movie about serial killer Ted Bundy.
The sheer scope, magnitude, and brazenness of fraud related to loans that were earmarked for people struggling to survive the pandemic is shocking even to longtime prosecutors who handle white-collar crime cases, according to several legal experts.
“I think people thought the government would never come looking for this money,” said Assistant US Attorney Amanda Masselam Strachan, chief of the criminal division and COVID-19 coordinator at the US Attorney’s Office for Massachusetts. “I think they thought it was easy.”
But, she said, they were wrong.
“This is not ordinary fraud,” Strachan said. “This is taking advantage of an extraordinary, trying, and difficult time in the nation’s history.”
The cases will remain an important priority for years, she said.
“We’re not looking to prosecute rounding errors or honest mistakes,” Strachan said. “We are looking for people who intentionally committed fraud.”
In August, Congress took the unusual step of extending the statute of limitations from five to 10 years for crimes related to the Small Business Administration’s two loan programs, the Paycheck Protection Program (PPP), and the COVID-19 Economic Injury Disaster Loan (EIDL) program, to give prosecutors more time to build cases against suspected fraudsters.
“It’s a reflection of the difficulty in making these cases and how dispersed and widespread this [fraud] is, and a recognition that they’re not going to be able to get this done in five years,” said Zachary Hafer, a former federal prosecutor who is now a partner at the law firm Cooley. “It’s a monumental task.”
Justice Department Inspector General Michael Horowitz chairs the Pandemic Response Accountability Committee, which oversees the more than $5 trillion in federal pandemic-related spending. Horowitz issued a fraud alert in January saying the committee had identified more than 69,000 questionable Social Security numbers that had been used to obtain $5.4 billion in pandemic loans and grants between April 2020 and October 2022.
The potential fraud involved the PPP and EIDL programs, which provided nearly $1.2 trillion in assistance to small businesses and their employees. The programs offered forgivable and low-interest loans, with restrictions on how the money was to be spent. Researchers have estimated that as much as $80 billion in PPP funds were fraudulently obtained.
Federal criminal charges involving pandemic loans and benefits have been brought against more than 1,800 defendants nationwide, resulting in the seizure of more than $1.2 billion in relief funds, according to federal authorities.
In Massachusetts, federal charges have been brought against more than 65 people in cases involving a total loss of about $32 million in pandemic-relief-related funds, according to a spokeswoman for the US Attorney’s office.
Nathaniel Mendell, a former federal prosecutor who served as acting US attorney for Massachusetts for nearly a year before leaving the office in January 2022, said the government’s emphasis “was on speed, not security” as it pushed out $800 billion in small-business loans in less than a year under one program to deal with the devastating impact of COVID-19.
“As soon as the nature and scope of government spending became apparent, US attorneys and federal prosecutors across the country recognized that it was a massive opportunity for fraud and would require a massive enforcement effort to keep pace,” said Mendell, now a partner at Morrison & Foerster. “The set of potential cases is almost infinite, tens of thousands of cases.”
In January, Bill Dessaps, 46, who operated ABC Tech, a used-car dealership in Abington, was arrested along with six other people in what prosecutors allege was a multi-state scheme to defraud the government. The government alleges that four loan recruiters in Florida helped Dessaps and more than two dozen other borrowers in Massachusetts, Florida, New York, Georgia, and Maryland to fraudulently obtain PPP loans totaling $7 million in exchange for more than $1 million in kickbacks.
Dessaps is accused of lying to obtain an $836,800 loan by claiming he needed it to pay 40 employees, then using the money to buy a house, a 2014 Rolls Royce, and to pay $32,000 to a breeder of French bulldogs, according to court filings. The home on Pine Street in South Easton was described in real estate listings as a 14-room “country manor” surrounded by five acres of land, and sold for $750,000 in October 2020.
Dessaps is charged with conspiracy to commit wire fraud and conspiracy to commit unlawful monetary transactions. His attorney, Jennifer McKinnon, said “absolutely, he maintains his innocence,” but declined to comment further on the case.
The Florida Instagram influencer, 33-year-old Danielle Nicole Miller, was indicted in 2021 on charges of wire fraud and aggravated identity theft. She is accused of fraudulently obtaining more than $600,000 in Economic Injury Disaster loans and pandemic-related unemployment benefits. Prosecutors allege she used some of the money to charter a private jet for a trip to California, stay in upscale hotels, rent luxury apartments, and splurge on designer shoes and handbags. She is scheduled to plead guilty in March, according to the court docket.
Her attorney, Mitchell Elman, declined to comment on the case.
Former pizzeria owner Dana McIntyre is scheduled to go to trial in May on charges of wire fraud, money laundering, and aggravated identity theft. He is accused of fraudulently obtaining a $661,650 Paycheck Protection Program loan when he owned Rasta Pasta Pizzeria in Beverly, then selling the shop and using his pandemic relief loan to buy a Vermont farm, several alpacas, two vehicles, and weekly airtime on a cryptocurrency-themed radio show, according to court filings.
McIntyre’s attorney, Brad Bailey, noted that his client has pleaded not guilty and said he is “preparing a vigorous defense” for the trial.
Judges have been ordering substantial prison terms for some defendants convicted of pandemic-related fraud. Prosecutors have argued that it’s necessary to send a message. A Stoughton electrician who used a $400,000 PPP loan to pay his mortgage and gave some of the money to relatives and friends, was sentenced to 15 months in prison in November. A Brighton food truck owner who pleaded guilty to fraud for obtaining $1.5 million in pandemic relief loans and investing much of it in the stock market, is awaiting sentencing.
“You usually see people trying harder to hide their criminal activity than we’ve seen with this,” Strachan said. “People just thought the money was there for the taking.”