Man pleads guilty to stealing more than $2 million from PPP loans
Officials say the man used the money to buy a yacht, a townhouse in northeast DC and a luxury sports sedan.
WASHINGTON — A 43-year-old DC man has pleaded guilty to fraudulently obtaining more than $2 million in federal Paycheck Protection Program (PPP) loans and Economic Disaster Loans (EIDLs).
According to a press release from the DC United States Attorney’s Office, Kenneth Gaughan of Washington, DC, also admitted to embezzling an additional $438,000 in funds from the Catholic Archdiocese of Washington, DC, where he was previously employed as superintendent. deputy.
Officials said Gaughan sometimes used a pseudonym of Richard Strauski to target federal funds from at least March 2020 to August 2020. According to government evidence, Gaughan applied for millions in PPP loans on behalf of nine companies. It received $2.1 million in PPP and EIDL funds.
PPP loans were created under the CARES (Coronavirus Aid, Relief, and Economic Security) Act. The loans were intended to be used by businesses and organizations for payroll costs, mortgage interest, rent and utilities during the COVID pandemic. EIDL loans were part of a program run by the Small Business Administration. They were designed to help struggling businesses and organizations in 2020.
In the embezzlement case, officials said Gaughan admitted defrauding the Archdiocese of Washington of more than $438,000.
Gaughan worked for the archdiocese as council director from 2008 and was later promoted to deputy superintendent.
Since at least June 2010, officials say Gaughan has compelled the archdiocese to pay bills fabricated by Gaughan allegedly for anti-bullying and crisis intervention programs, as well as for software used to send mass messages to students and families in the Archdiocese. He would then conceal his ownership and control over the three companies, using a pseudonym.
Officials say Gaughan used money from the two programs, in part, to buy a $300,000 yacht, a $1.13 million townhouse in northeastern Washington state and a $46,000 luxury sports sedan.
“As small businesses struggled to stay afloat, Kenneth Gaughan stole taxpayer dollars to fund his lavish lifestyle, home, car and yacht,” U.S. Attorney Graves said. “These emergency funds were intended to help our small businesses weather the COVID-19 pandemic, not to line the pockets of fraudsters. Yet this defendant brazenly undertook his scheme even after stealing hundreds of thousands of dollars from his former faith-based employer.
Gaughan was arrested for fraud on August 11, 2020. He pleaded guilty in the United States District Court for the District of Columbia to one count of wire fraud and one count of money laundering in the PPP and EIDL matter, and one count electronic fraud. in the matter involving the Archdiocese.
“Mr. Gaughan was so emboldened by deceiving a church for several years that he then turned his deception to the government, stealing funds meant to be a lifeline for struggling businesses and using them greedily to satisfy his own desires. materialists,” said FBI Special Agent in Charge Sobocinski. “The FBI and our law enforcement partners will continue to diligently investigate these crimes of fraud and hold these individuals accountable.”
Gaughan is scheduled to be sentenced on June 15, 2022. The wire fraud charge carries a statutory maximum of 20 years in prison. and the money laundering charge carries a maximum of 10 years in prison.
Gaughan will have to pay restitution for the PPP and EIDL fraud in the amount of $2,182,465 and to the Archdiocese in the amount of $438,200, as well as a judgment forfeiture of the money.
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