Bayville Adventure Park owner pleads guilty to COVID-19 loan fraud

The proprietor of each Bayville Journey Park and the now defunct Jekyll & Hyde restaurant in Manhattan pleaded responsible in federal court docket in Central Islip Thursday to a COVID-19 mortgage fraud scheme.

Donald Finley, of Locust Valley, pleaded responsible to catastrophe reduction fraud and wire fraud in connection together with his receipt of tens of millions of {dollars} in small enterprise loans underneath the Paycheck Safety Program, or PPP, and Financial Damage Catastrophe Mortgage Program, officers mentioned.

Now, he faces as much as 30 years in jail, in addition to restitution totaling greater than $3.2 million and a positive of as much as $1.25 million.

“Finley has admitted diverting tens of millions of {dollars} in COVID-19 catastrophe reduction funds to finance his private bills, together with the acquisition of a house in Nantucket, Massachusetts,” U.S.  Lawyer Breon Peace mentioned in an announcement.

Peace mentioned that the U.S. Lawyer’s workplace “will proceed investigating and prosecuting these, just like the defendant, who shamelessly steal from authorities applications that have been meant for struggling small companies and households in the course of the pandemic.”

Created by Congress, the applications are a part of the Coronavirus Assist, Reduction, and Financial Safety (CARES) Act, enacted on March 29, 2020. The CARES Act was designed to offer emergency monetary help in reference to financial results of the COVID-19 pandemic.

One function of the CARES Act included forgivable loans to small companies for job retention and sure different bills via the PPP. The PPP allowed qualifying small companies to obtain unsecured loans on favorable phrases, which they have been required to make use of for specified bills, together with payroll prices, curiosity on mortgages, hire and utilities. The PPP supplied for forgiveness of the mortgage if the recipient companies spent the proceeds on these specified bills inside a restricted time interval and used a sure proportion for payroll prices.

Between March 2020 and March 2021, Finley utilized for, and subsequently acquired, no less than 29 PPP and EIDLP loans totaling roughly $3.2 million, on behalf of company entities he managed.

However officers mentioned that as a substitute of utilizing these funds for catastrophe reduction Finley used these funds for his private bills, together with the acquisition of the Nantucket residence in February of 2021.

“We have now seen the abuses of catastrophe reduction applications when all too usually criminals discover a possibility for exploitation,” Thomas Fattorusso, particular agent-in-charge of Inner Income Service-Prison Investigation in New York, mentioned in an announcement.

“On this case, Finley obtained tens of millions in COVID-19 reduction funds, solely to make use of the ill-gotten money for his personal private acquire. Whereas he stands out as the proprietor of an amusement park meant to deliver pleasure, together with his responsible plea and pending sentencing, Finley could also be going through a future that he might discover a lot much less satisfying,” he added.

“Mr. Finley took benefit of a program meant for use to help small companies as a part of the CARES Act of 2020, when he devised a scheme to submit fraudulent data to the federal government to acquire tens of millions in funds in the course of the pandemic to fund his lavish life-style,” Daniel Brubaker, inspector-in-charge of the U.S. Postal Inspection Service, New York Division.

“Not solely did he buy a house on Nantucket, however he utilized these funds to pay for private bills,” he added. “Postal Inspectors and their legislation enforcement companions are at all times on a mission to make sure those that really want help get it, and those that scheme and break the legislation to obtain funds which they aren’t entitled to, are delivered to justice.”

One other supply of reduction supplied by the CARES Act was the EIDLP, which supplied low-interest financing to small companies, renters, and householders in areas affected by declared disasters. Underneath this system, EIDLP recipients have been eligible to obtain advances of as much as $10,000 for small companies inside three days of making use of for an EIDL (EIDL Advance). The quantity of an EIDL Advance was decided primarily based on the variety of workers working for the applicant. The EIDL Advance didn’t need to be repaid.

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