Please E-mail suggested additions, comments and/or corrections to Kent@MoreLaw.Com.
Date: 05-25-2023
Case Style:
Case Number: 2:23-cr-00181
Judge: Joan M. Azrack
Court: United States District Court for the Eastern District of New York (Nassau County)
Plaintiff's Attorney: United States Attorney’s Office in Central Islip
Defendant's Attorney:
Description: Central Islip, New York criminal defense lawyer represented Defendant charged with wire fraud and disaster relief fraud.
Donald Finley, a Locust Valley businessman and owner of the now-defunct Jekyll & Hyde theme restaurant in Manhattan and the Bayville Adventure Park on Long Island, pleaded guilty to disaster relief fraud and wire fraud in connection with his receipt of millions of dollars in small business loans under the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan Program (EIDLP). Today’s proceeding was held before United States Magistrate Judge Arlene R. Lindsay. When sentenced, Finley faces up to 30 years in prison, as well as restitution totaling more than $3.2 million and a fine of up to $1.25 million.
Breon Peace, United States Attorney for the Eastern District of New York, Thomas Fattorusso, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York (IRS-CI), and Daniel Brubaker, Inspector-in-Charge, United States Postal Inspection Service, New York Division (USPIS), announced the guilty plea.
“Finley has admitted diverting millions of dollars in COVID-19 disaster relief funds to finance his personal expenses, including the purchase of a home in Nantucket, Massachusetts,” stated United States Attorney Peace. “This Office will continue investigating and prosecuting those, like the defendant, who shamelessly steal from government programs that were intended for struggling small businesses and families during the pandemic.”
“We have seen the abuses of disaster relief programs when all too often criminals find an opportunity for exploitation. In this case, Finley obtained millions in COVID-19 relief funds, only to use the ill-gotten cash for his own personal gain. While he may be the owner of an amusement park meant to bring joy, with his guilty plea and pending sentencing, Finley may be facing a future that he could find much less enjoyable,” stated IRS-CI Special Agent-in-Charge Fattorusso.
“Mr. Finley took advantage of a program intended to be used to support small businesses as part of the CARES Act of 2020, when he devised a scheme to submit fraudulent information to the government to obtain millions in funds during the pandemic to fund his lavish lifestyle. Not only did he purchase a home on Nantucket, but he utilized those funds to pay for personal expenses. Postal Inspectors and their law enforcement partners are always on a mission to ensure those who truly need assistance get it, and those who scheme and break the law to receive funds which they are not entitled to, are brought to justice,” stated USPIS Inspector-in- Charge Brubaker.
As set forth in court filings, between March 2020 and March 2021, amid the COVID-19 pandemic, Finley fraudulently applied for, and received, at least 29 PPP and EIDLP loans totaling approximately $3.2 million, on behalf of corporate entities he controlled. Instead of using the funds for disaster relief, Finley diverted them for personal use, including the purchase of a home in Nantucket, Massachusetts, in February 2021.
Congress created the PPP and EIDLP as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Enacted on March 29, 2020, the CARES Act provided emergency financial assistance in connection with economic effects of the COVID-19 pandemic. One source of relief provided by the CARES Act was the allocation of funds for the issuance of forgivable loans to small businesses for job retention and certain other expenses through the PPP. The PPP allowed qualifying small businesses to receive unsecured loans on favorable terms, which they were required to use for specified expenses, including payroll costs, interest on mortgages, rent and utilities. The PPP provided for forgiveness of the loan if the recipient businesses spent the proceeds on these specified expenses within a limited time period and used a certain percentage for payroll costs.
Another source of relief provided by the CARES Act was the EIDLP, which provided low-interest financing to small businesses, renters, and homeowners in regions affected by declared disasters. Under the program, EIDLP recipients were eligible to receive advances of up to $10,000 for small businesses within three days of applying for an EIDL (EIDL Advance). The amount of an EIDL Advance was determined based on the number of employees working for the applicant. The EIDL Advance did not have to be repaid.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorney Mark E. Misorek is in charge of the prosecution.
Outcome: Defendant pled guilty.
Plaintiff's Experts:
Defendant's Experts:
Comments: