Fraud involving disaster relief makes the federal government very angry. That anyone would be deprived of lifesaving support because someone else was greedy enough to steal and deplete relief resources is the type of crime that the federal government will prosecute as strongly as they possibly can. This also holds true for Medicare and Medicaid fraud. But in this case, the funds being depleted were the payroll protection loans disbursed to businesses in the early stages of the pandemic when many employees found themselves laid off and out of work.
Gregory J. Blotnick, who splits time between New York City and West Palm Beach, was recently indicted for his role in fraudulently obtaining $3.8 million in PPP loans. The bad news for Blotnick: The federal government bases sentencing for fraud on the amount of money stolen. Since the fraud was related to disaster relief, he will face enhanced charges. This is exactly the type of scheme that results in sentences of a decade or greater.
What happened?
Essentially, when you request relief from the government, you are obligated to use the money for the intended purpose. In this case, the loans were supposed to help businesses protect their employees and payroll during COVID. This prevented more employees from filing unemployment and gave employees a lifeline when they had no income coming in. So he didn’t have to lie to get the payroll loan. In this case, the fraud was directly related to acquiring the loan and then using it for a purpose for which it was not intended.
In this case, Blotnick put the PPP money into the stock market where he promptly lost it all. Blotnick is also accused of lying on official applications for the PPP loans. Blotnick will be charged individually for every fraud he committed. He is alleged to have submitted 8 fraudulent PPP applications. He then used the money to make unsound investments. His employees never got a dime.
The consequences
Blotnick is facing several charges all related to the same scheme. The government will be able to individually charge him with 8 counts of public services fraud. Because the funds were earmarked for pandemic relief, the charges are kicked up even higher than they normally would be. The amount of money stolen in the scheme is also quite significant. Since fraud charges are related to the amount of money stolen, we can safely surmise that this particular defendant will face the harshest penalties that the federal government can legally pursue.
Talk to a West Palm Beach Criminal Defense Attorney
If you’re facing federal charges, then you need a West Palm Beach criminal attorney with the experience to argue in federal court. Call The Skier Law Firm, P.A. today to discuss your situation in more detail and allow us to begin preparing your defense immediately.
Resource:
justice.gov/usao-nj/pr/new-york-and-florida-resident-charged-38-million-paycheck-protection-program-fraud-scheme