Date: January 10, 2023 Contact: newsroom@ci.irs.gov Vanessa Roberts Avery, United States Attorney for the District of Connecticut, Joleen D. Simpson, Special Agent in Charge of IRS Criminal Investigation in New England, and Jean Pierre Njock, Acting Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation today announced that John Matava, of Coventry, has been charged by federal criminal complaint with offenses related to his receipt of COVID-19 relief funds. Matava was arrested on January 7, 2023. He appeared yesterday before U.S. Magistrate Judge Thomas O. Farrish in Hartford and was released on a $60,000 bond. In March 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act provided emergency financial assistance to Americans suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of forgivable loans to small businesses for job retention and certain other expenses through the Paycheck Protection Program (PPP). In April 2020, Congress authorized more than $300 billion in additional PPP funding. The PPP allowed qualifying small businesses and other organizations to receive unsecured loans at an interest rate of 1%. PPP loan proceeds were to be used by businesses on payroll costs, interest on mortgages, rent and utilities. The PPP allowed the interest and principal to be forgiven if businesses spent the proceeds on these expenses within a certain period of time of receipt and used at least a certain percentage of the amount to be forgiven for payroll. The PPP was overseen by the Small Business Administration, which has authority over all PPP loans. Individual PPP loans, however, were issued by private approved lenders, such as Celtic Bank, which received and processed PPP applications and supporting documentation, and then made loans using the lenders’ own funds, which were guaranteed by the SBA. As alleged in the criminal complaint, in April 2020, Matava applied to Celtic Bank for a $100,000 PPP loan for J.M. Builders LLC. The application submission included several false representations, including that J.M. Builders LLC had eight employees and an average monthly payroll of $40,000; that the monies would be used for payroll, lease, mortgage, interest and utilities; and that the business owner was not subject to pending formal criminal charges. At the time of the PPP loan application, there were no records of payroll or employees with the Connecticut Department of Labor for J.M. Builders LLC, and Matava was subject to criminal charges in two pending cases related to arrests in 2017 and 2018. It is alleged that on April 22, 2022, Celtic Bank disbursed $100,000 to a bank account for J.M. Builders LLC on which Matava was the signatory. The account was opened on April 21, 2020, and had a balance of $0 immediately prior to the loan funds being disbursed. Between April 2020 and January 2021, Matava used the funds primarily for personal expenditures, including $3,498 to pay a dog breeder, $4,777 for payments to an RV superstore in Connecticut, and legal fees, including a $2,000 retainer, for four court cases in Rockville, Connecticut. It is further alleged that in January 2021, Matava sought $100,000 in additional PPP funds from Celtic Bank, and included with the application several additional false statements and fraudulent tax documents. Celtic Bank denied the application. The complaint charges Matava with wire fraud affecting a financial institution, which carries a maximum term of imprisonment of 30 years, and with making an illegal monetary transaction, which carries a maximum term of imprisonment of 10 years. U.S. Attorney Avery stressed that a complaint is only a charge and is not evidence of guilt. Charges are only allegations and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt. This matter is being investigated by the Internal Revenue Service – Criminal Investigation and the Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorney Christopher W. Schmeisser. Individuals with information about allegations of fraud involving COVID-19 are encouraged to report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721, or via the NCDF Web Complaint Form.
