WILLIAMSPORT – Three Columbia County residents in two separate cases have admitted to fraudulently obtaining nearly $ 700,000 in COVID-19 relief funds.
Darryl Corradini, 63, and Vicki Hackenberg, 57, pleaded guilty on Monday in United States Middle District Court to charges of conspiracy to commit money laundering.
Hayes D. Horner Jr., 67, of Berwick, followed with a guilty plea for wire fraud.
The plea agreements require Corradini and Hackenberg to pay compensation totaling $ 431,591. Horner must pay $ 158,900 plus a confiscated $ 100,582 that the government seized after being frozen by a bank.
The two Bloomsburg residents admitted to using Paycheck Protection Program (PPP) funds to illegally obtain loans for uses that included buying more than $ 100,000 in bitcoin.
As part of the Coronavirus Aid, Relief and Economic Security Act (CARES), the payroll protection program authorizes forgivable loans to small businesses facing financial hardship during the pandemic.
Corradini set up in December 2019 a shell company, CGM Realty LLC, which was used to apply for PPP loans. The company’s address was Hackenberg’s apartment.
The two admitted to creating fake CGM employment and payroll documents to open commercial accounts with Bank of America and the Bitcoin trading companies Athena Bitcoin Inc. and Athena Investor Services in Chicago.
The scheme involved unindicted co-conspirators, Deputy U.S. Attorney Phillip A. Carabello said.
Horner admitted that he and unindicted co-conspirators illegally obtained or requested more than $ 250,000 in loans under the Small Business Administration‘s Economic Disaster Lending (EIDL) program.
The program was created to help eligible businesses facing significant financial disruption as a result of the coronavirus pandemic.
The proceeds could only be used to pay fixed debts, payroll, accounts payable and other bills that could have been paid without the pandemic. They couldn’t be used for lost sales or profits.
The fraudulent loan applications cited by Carabello included one on May 27, 2020, on behalf of a Massachusetts resident without his knowledge, and on June 24, 2020, on behalf of a deceased individual in Arizona.
On June 30 and July 2, 2020, Horner opened checking accounts in Horner’s Towing & Recovery’s name at two separate banks, the prosecutor said.
Looking at the activity involving these two accounts, Carabello rated each bank as it was considered suspicious activity denying a requested wire transfer.
One was $ 94,500 at the Bank of China for a beneficiary in Hong Kong and the other $ 70,000 at a Bank of America account, he said.
Each of the three remains free on personal commitment while awaiting conviction. They face at least two years in prison according to statements made in court.
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