A South Carolina businessman has been charged today in federal court in Worcester with COVID relief fraud.
David Breen, 54, of Mount Pleasant, S.C., was charged by an Information with one count of theft of government property, for allegedly misappropriating COVID-19 funds for personal use.
According to court filings, Breen allegedly spent more than $1.2 million in Economic Injury and Disaster Loan (EIDL) money that he obtained from the U.S. Small Business Administration to build a home and purchase motor vehicles. Through the EIDL program, the SBA provided loans to small businesses that suffered substantial economic injury due to the COVID-19 pandemic.
Specifically, it is alleged that in March 2022, Breen applied for EIDL funds on behalf of ‘Fun Zone,’ an entity through which he operated ‘Pinz,’ a bowling alley and other entertainment venue in Milford, Mass. To obtain the loan, Breen allegedly entered into a loan agreement with the SBA in which he agreed, among other things, to use the loan proceeds as working capital for his business. After receiving approximately $1.5 million from the SBA, Breen allegedly used more than $1.2 million of this money, through June 2023, to build a home for himself in Mount Pleasant, S.C., to purchase a $111,000 truck, and for a down payment on a $98,289 Mercedes.
The charge of theft of government property carries a maximum penalty of up to 10 years in prison, up to three years of supervised release and a fine of up to $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes that govern the determination of a sentence in a criminal case.
United States Attorney Leah B. Foley; Michael J. Krol, Special Agent in Charge of Homeland Security Investigations in New England; and Massachusetts Inspector General S. Jeffrey Shapiro made the announcement. Valuable assistance was provided by the U.S. Small Business Administration, Office of Inspector General, Boston Region. Assistant U.S. Attorney Brendan D. O’Shea of the Worcester Branch Office is prosecuting the case.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus and https://www.justice.gov/coronavirus/combatingfraud.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline via the NCDF Web Complaint Form.