Maine Man Gets 33 Months in Prison for Misusing PPP Funds

By Judy Harrison, Bangor Daily News, Maine (TNS).

The second Maine man who admitted defrauding a pandemic business loan program was sentenced Wednesday in U.S. District Court in Bangor to 33 months in federal prison.

Craig Franck, 40, of Levant admitted in August that he used more than $300,000 from two loan programs authorized by Congress during the COVID-19 pandemic for bail on a theft charge in Florida. He also bought exercise equipment, a telescope, a big screen television, a drone and two trucks, among other expenses, with the money.

Franck pleaded guilty to three counts of wire fraud and one count of money laundering.

Franck is the second person in Maine to be charged with fraudulently obtaining a Paycheck Protection Program loan, but the first to be charged with fraudulently obtaining an Economic Injury Disaster loan.

In sentencing Franck, U.S. District Judge Lance Walker called his actions “narcissistic” and referred to him as a “high-tech pickpocket.”

“The difference is the amount you took is large and it came from the public purse,” Walker said.

Under the federal sentencing guidelines, Franck faced between 33 and 41 months in prison. Assistant U.S. Attorney Andrew Lizotte recommended a sentence at the high end of the guideline range. Bangor defense attorney Charles Hodsdon urged Walker to sentence Franck to 33 months.

In addition to prison time, Franck was sentenced to three years of supervised release and to forfeit $321,560 that he received illegally.

He received that amount electronically from two separate loan programs authorized by Congress early in the pandemic — the Paycheck Protection Program and the Economic Injury Disaster Loan Program.

The U.S. Small Business Administration handled applications for disaster loans while banks processed applications for the Paycheck Protection Program.

Franck received the funds for two companies, CCF Acoustics LLC and CCF Acoustical Systems. The firms were contracted to do acoustical and ceiling work.

In his applications to the loan programs, Franck lied about how much money the companies made and how many people he employed, according to court documents.

In August 2021, Franck pleaded guilty in a Florida court to stealing between $20,000 and $100,000 in that state. He was sentenced to seven years of probation, according to the complaint filed last March.

Franck agreed to be held without bail at his first court appearance on March 31. That time will be applied to his sentence.

Nathan Reardon, the first person in Maine to be charged and convicted of fraudulently obtaining funds from a pandemic relief program, is serving a 20-month sentence at the United States Penitentiary Canaan in Waymart, Pennsylvania, according to the bureau of prisons inmate locator. His earliest possible release date is Sept. 9, 2023.

Reardon, 44, of Skowhegan and Plymouth pleaded guilty in July in federal court in Bangor to five counts of bank fraud for obtaining a $60,000 Paycheck Protection Program loan in 2020 by falsifying information about payroll for his business.

In addition to prison time, Reardon was sentenced to three years of supervised release and ordered to pay more than $60,000 in restitution.

While pandemic fraud in Maine has been much less prevalent than in more populous states, investigations into suspected fraud and the prosecutors of the perpetrators is keeping the Department of Justice busy.

In September, U.S. Attorney General Merrick Garland announced the creation of three strike force teams, based in Florida, Maryland and California, to enhance its existing efforts to combat and prevent COVID-19-related fraud.

“Since the start of this pandemic, the Justice Department has seized over $1.2 billion in relief funds that criminals were attempting to steal, and charged over 1,500 defendants with crimes in federal districts across the country, but our work is far from over,” Garland said in announcing the teams.

In addition to criminal cases, civil investigations of 1,800 people and entities for alleged misconduct in connection with pandemic relief loans totaling more than $6 billion had been launched as of September.

The department’s efforts to combat COVID-19-related fraud schemes include investigations involving the Paycheck Protections Program, Economic Injury Disaster Loan program, Unemployment Insurance programs and COVID-19 healthcare fraud enforcement.

A recent report from the U.S. Government Accountability Office estimated unemployment fraud from pandemic jobless benefits may top $60 billion.

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