A Washington, D.C., man will serve up to 50 years in prison after he was caught using federal COVID-19 small business relief dollars to fund a lavish lifestyle.
According to a March 2 release from the U.S. Attorney's Office for the District of Columbia, Kenneth Gaughan, 43, fraudulently obtained over $2.1 million in the Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL) programs, which he put toward the purchase of a luxury sports car, a $1.13 million rowhouse and a yacht.
“While small businesses were struggling to stay afloat, Kenneth Gaughan stole taxpayer dollars to fund his lavish lifestyle, home, car and yacht,” U.S. Attorney Matthew Graves said in the release. “These emergency funds were intended to help our small businesses weather the COVID-19 pandemic, not 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 also admitted to embezzling over $438,000 from the Catholic Archdiocese of Washington, D.C., where he worked as assistant superintendent.
The defendant reportedly committed numerous acts of frauds in his applications to receive over $2.7 million in PPP loans on behalf of nine total companies, some in his name and some under an alias, including forged bank records and fake paperwork.
In total, Gaughan pleaded guilty to one count of wire fraud in the Archdiocese case, one count of wire fraud in the PPP and EIDL case, and one count of money laundering in the PPP and EIDL case.
